Frequently asked questions

Popular reasons include construction, conversion or refurbishment.  We can also arrange self build mortgages if you are looking to build your own home

We are experts in presenting development projects in the best light to potential lenders, helping you achieve the best solution.  We go to great lengths to understand the project, your experience, your contractors and third party experts to ensure that the lender is fully informed.  We then sense check your numbers and speak to the right lenders with the appetite to support you.

Yes – but you will need a larger deposit.   Lenders like the developer to put down a substantial value of the land as a deposit. If the land has planning permission most lenders will require a borrower to put down a 40% deposit, but If the land does not yet have planning permission then the lender needs to decide what the chances of getting planning permission are, and what would happen if planning permission wasn’t achieved. If they were comfortable with the risks, they may still lend at 60% to 65% of the purchase price. If they were not comfortable, they would reduce their exposure substantially and perhaps lend only 30% to 40% of the purchase price

Once the loan is approved, the lender will appoint a professional surveyor. They will visit the site prior to each major stage, check the work has been done to the required standard and approve the release of the next tranche of funds to complete the following stage. We have a number of lenders who will fund 100% of the build costs, subject to a situation where they advanced no more than 65-70% of the gross development value (GDV) of the project at any time.  If further funding is required we can approach mezzanine funding lines to support you.

Named for its place in the capital structure, mezzanine financing is a form of junior capital that sits between senior debt financing and equity and is a means by which companies can access capital beyond what they’re otherwise able to achieve on a senior basis. Mezzanine financing is also the last stop along the capital structure where owners can raise substantial amounts of liquidity without selling a large stake in their company.

Mezzanine financing is ultimately a way for companies to grow faster than they could otherwise by using senior financing options or their own capital alone.

Interest is usually repaid at the end of the loan.  Interest will therefore be rolled up with the capital.  Our advisors will explain this for you and explain some of the pros and cons of this model.

Once a development is completed the development loan will either be repaid through the sale of the units, or by arranging a more traditional mortgage – either commercial or buy to let. The term mortgage is based on the final gross development value (GDV) of the project.  If you are building your own property via a self build mortgage the finance is already in place.

If the actual estimated rental income (according to a local estate agent) is high enough a developer should be able to release up to 70% of the GDV of the project. This should repay all the funds used in the project, and potentially release some profits earlier.

If cash flow is restricting the purchase of future development plots then it may be wise to release equity prior to the completion (or sale) of the project. We have a number of lenders that will allow equity to be released, whilst final touches are being made, or units are being marketed and sold.  This is known as developer exit finance.  Sometimes this can mean that your workforce can move straight onto the next site without a gap in work.