Development Finance
What is Development Finance?
Development finance is a short-term funding option designed to assist with the purchase and build costs of a residential or commercial development project.
Why Choose Development Finance?
Development finance can help to fund the often large outlay required at the start of a development project.
How it Works
Development finance typically offers terms between 12-24 months, with the finance being drawn down in stages as your project progresses.
Development Finance at a Glance
Eligibility:
Individuals and property developers with relevant experience, a viable project along with detailed plans and a full breakdown of costs.
Loan Amounts:
£100,000 - £25m +
Terms:
12 - 36 Months
Interest Rates:
From 0.50% per month
GDV:
Up to 75% Loan to GDV (Gross Domestic Value)
Security:
First legal charge over the land or property being developed.
Turnaround time:
Typically, 4-6 weeks.
Repayment terms:
Rolled up or serviced options available.
Development finance is a short-term funding solution designed to help property developers with the purchase and build costs of residential or commercial projects. Whether you’re building new homes or commercial properties, or renovating an existing structure, development finance can provide the financial support you need to bring your vision to life. At Elite Business Funding, we offer flexible property development finance, meeting the unique needs of developers across the UK.
What is Development Finance?
Development finance is a short-term funding option designed to help property developers with the costs of building residential or commercial properties. This type of finance covers both the land purchase and the associated construction costs, providing the developer with the capital needed to fully complete the project.
Property development finance can be used for a wide range of projects, making it an ideal solution for developers working on residential, commercial, mixed-use, or renovation projects. Flexible and scalable, this type of funding allows developers to access the capital needed to fund every stage of the project, from land acquisition to construction and completion.
Who Can Apply for Development Finance?
Lenders typically prefer to work with an experienced developer, however if you are looking to finance your first project, and provided you have an experienced team of professionals behind the project, they may still be willing and able to assist. A development project team would consist of, but not be limited to, building contractors, architects, surveyors, and project managers.
Lenders will typically finance up to 70% of the purchase of the land or building, and up to 100% of the build costs. As the finance is secured against the property, if you have additional security available this can help secure a higher amount of borrowing, along with reducing the interest rate due to the perceived lower risk to the lender.
A big factor in the lender’s decision process is the Gross Development Value (GDV) of the project. This is the value of the development post construction and will denote the profit to be made, and again may impact the amount you can borrow and the available options.
Why Choose Development Finance?
Development finance offers several key benefits for property developers, including:
- Access to Substantial Capital: Development finance can provide up to 100% of the build costs, allowing you to fund every stage of the project without worrying about cash flow issues.
- Flexible Repayment Options: Choose between rolled-up or serviced options, ensuring that the repayment terms align with your project’s cash flow needs.
- Stage Payments: Funds are released in stages, ensuring that money is available when needed for each phase of the development.
- Short-Term Loan Terms: With terms ranging from 12 to 24 months, housing development finance covers the time needed to complete the project, from land acquisition to construction and sale.
- Tailored to Your Project: Development finance is designed to meet the specific needs of each project, whether it’s residential, commercial, or mixed-use, helping you achieve your goals.
- Supports Both New Builds and Renovations: Whether you’re building a new property or renovating an existing structure, development finance can support a wide range of property types.
Key Benefits of Development Finance
- Access large sums of finance low initial investment
- Take on larger projects than you would be able to otherwise
- Cover up to 100% of the build cost
- Increase your ROI by not giving away profit/equity to 3rd party investors
- Only pay interest on completion of the project and when the loan is being exited
How Does Development Finance Work?
At Elite Business Funding, we aim to make the process of securing development finance UK simple and straightforward. You’ll begin by submitting an application with the key project details, such as the land purchase, plans, and costs. We assess the viability of your project, considering factors like Gross Development Value (GDV), location, and your team’s experience.
Once approved, we typically offer up to 70-80% of land costs and 100% of build costs, with funds released in stages as the project progresses. Repayment options are flexible, with rolled-up or serviced plans to suit your cash flow needs. The loan is repaid upon project completion, either through sale or refinancing. Our team will support you throughout the process, ensuring a smooth funding experience.
To discuss your project and see how housing development finance could work for you, get in touch with our team of property finance specialists today.
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