Borrowing larger amounts, with the bulk up front and the rest drawn over the build process? Development Finance is considered short-term lending to help developers with project purchase and build costs. Finance can also introduce you to JV and Mezzanine lenders to evaluate all your options. Suitable for residential, commercial, and mixed-use projects.
Development finance is for larger-scale residential or semi-commercial projects, including ground-up builds and conversions. Loan amounts of several million pounds are not unusual. As these schemes are more complex and can range from 18-36 months with interest typically rolled up and paid at term, several million pounds loan amounts are not unusual. Usually split into an upfront loan for the purchase of the asset and a second loan for costs which is drawn down in pre-agreed stages as work is completed and signed off by an independent project-monitoring surveyor. By providing a detailed schedule of works in advance with costs broken down, it is often possible to secure 100% of the cost of works alongside the loan for the asset. Development finance generally is more expensive than other forms of property finance. The higher interest rate charged by the lender reflects their risk as the project progresses to completion. On completion, the property value will go up, and you will have the option of transferring to a lower cost loan while awaiting sale of the units. This is known as a Development Exit loan. The repayment is geared to the sales plan for the project, including the timing of planned sales, and will take into account what proportion of the proceeds you may be able to retain at each stage. If you are selling units, the lender will likely want you to use proceeds from the first unit sales to reduce the outstanding balance until the loan reaches 60% or less of the value of the security. Refurbishment Finance is used when completing light to heavy refurbishments of a residential property, with or without the need for planning permission or building regulation approval. This can include converting a commercial property into a residential one. You must be able to demonstrate a realistic exit strategy.
Bush Property Ltd is a Privately Owned Family Company. Reg: 06857600
The FCA does not regulate the forms of Business Commercial Mortgages to Limited Companies.
