Development finance is used to fund the build costs of a new project or to fund a combination of both the land purchase and build costs.
Property development requires meticulous planning from sourcing the right site through to carefully selecting your project management team and contractor.
With this in mind, securing the most suitable borrowing option that works best for you and your business is just as crucial and should be given just as much consideration.
Types of development finance
Project types generally fall under the following banners:
- Light refurbishment (no planning permission required; no structural work undertaken)
- Heavy refurbishment (planning permission is required; structural work is typically undertaken; more complex projects)
- House building (building a structure from the ground up)
How much can I borrow?
The majority of lenders will require the applicant to demonstrate a track record of developing property successfully.
You can secure finance for both the land purchase and the development works by borrowing against the equity in the site as well as the anticipated value of the completed development.
Our lenders can lend up to 70% of the land cost, and up to 100% of the build costs subject to experience.
A development loan normally has a term of 3 – 24 months and is repaid through sale proceeds or by refinancing the borrowing onto a long term loan. Interest is normally “rolled-up” and incorporated into the loan amount so that no repayments are required while the loan is outstanding.