COMMERCIAL FINANCE

Property Development Finance

Property development finance is a type of business finance used for the purpose of funding a residential, commercial, or mix-use property development. This might include new residential housing projects, office block construction or more expansive regeneration initiatives

It is not used for smaller developments where home renovations or property improvement is involved. When this is the case, there are other types of bridging finance that can be used.

Experience Matters

Having experience in property development cannot be underestimated and lenders like to see some previous involvement in a project – however small – that has been successful and profitable. It is helpful if you have a good team of builders, planners, and architects on your team.

Gross Development Value

One of the most important calculations of any property development finance proposal will be your Gross Development Value (GDV). It lets the lender establish if your project is lend-worthy. Many lenders might not consider an application if the total build costs exceed 75% of the GDV or end value of the project. A worthwhile investment is one that allows the lender to loan 65% of the GDV, even if this equates to 100% of total build cost.

We have access to a full range of funders that can help with:

Land purchase and development cost funding
Up to 100% of build costs
Loans from £150,000 to £100 million
Terms up to 2 years
Stage drawdowns
Interest rolled-up, therefore no month repayments are required
Arrangement fees added to the loan
100% funding available with additional security
Mezzanine funding which can top up a shortfall in senior debt funding

PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. COMMERCIAL MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY OR THE PRUDENTIAL REGULATION AUTHORITY.

Information Required

For a funder to appraise a project you will need a considerable amount of information. This includes, but is not restricted to:

Property development curriculum vitae (CV)
Planning permission
Purchase price of the land
Total build cost
Gross development value (GDV), this is the end value of the development once finished and any funding agreed will be a percentage of this figure.
Full costing breakdown
Clear timescales
Contingency funds
Potential yield from the project

Speak to one of our experienced commercial managers about property development finance for you or your business.

Call FFP today on

01745 530020

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COMMERCIAL FINANCE

Property Development Finance