Development Finance – What & Why

Making Development Finance Accessible

Development Finance is one of the most sought-after financing products in the UK. When used wisely, Development Finance can unlock many potential rewards at once. From helping planned projects get off the ground successfully to making sure that funding shortfall doesn’t adversely affect the development, Development Finance packages play many important roles.

Developing properties has long been known to be a profitable venture. With adequate experience, it’s very much possible to take advantage of the prevailing market conditions and maximise the profits. Landlords, on the other hand, can look to enhance their property portfolio, while also investing in existing properties to strengthen the rental stream of income. Businesses can aim to acquire and develop newer properties to expand operations, optimise investments and address various space requirements. However, getting a suitable Development Finance package that ticks all the boxes isn’t quite easy as getting a property mortgage. Therefore, it becomes essential to have an experienced whole of market broker like Commercial Finance Network look after your application.

If you are a property developer, investor or landlord, Commercial Finance Network brings exhaustive Development Finance solutions within your reach. These solutions can help facilitate projects like:

• Land and/or property purchase
• Build to let
• Residential development
• Commercial development
• Mixed-use development
• Major and minor refurbishments
• Conversions

Notable Features of Our Development Finance Services

• Flexible Development Finance solutions starting from £10,000 for UK property developers, investors and landlords
• Industry leading approval rates for development loan applications
• Each Development Finance package we broker is customised for the concerned project
• Avail some of the lowest interest rates for property development loans
• Development Finance to cover up to 70% of Gross Development Value (GDV)
• Impeccable track record of broking affordable and fast loans
• Development Finance to cover the purchase, development, refurbishment and sale of properties
• Guaranteed decisions within 24 hours
• Development Finance offers from leading whole of market lenders across the UK
• No hidden fees
• Free quotes available upon request

What is Development Finance?

Development Finance is one of the most essential financing tools for developers and landowners. In regard with commercial and residential land properties, the ultimate realisation of value comes from occupation or use. Therefore, it becomes imperative for developers to be able to readily materialise their plans so as to start generating income from their projects.

This is where Development Finance comes into the picture. As the name suggests, Development Finance is an external financing product that is aimed solely at funding property development projects.

Example

Let’s consider the example of an experienced commercial property developer business. The business has recently come across a land acquisition opportunity via an open auction. The business has managed to outbid the competitors and yet secure the deal at an attractive price point.

This, however, has exhausted much of the financing resources at their disposal. The ongoing repayment schedule for the property also means that it won’t be any easier to fund the development in near future. As a way of resolving this crisis, the business decides to get a specialist build-to-let Development Finance package.

Approved within days, the funds are made available as and when required as the project shapes up. This allows the business to readily go ahead with the development. The overall timeline of revenue generation is proportionately shortened, further maximising the profits generated from the project.

Why Development Finance

Development Finance is not just a financing tool – it’s an indispensable support for many developers. Therefore, it becomes essential to understand why developers, investors and landowners need Development Finance.

The most striking feature of any Development Finance package is the tether it has with the project. This tether lies firm with the inherent value of the project. This further allows the borrower as well as the lender to reduce the associated risks. The value of each project is usually quantified using the ‘Gross Development Value’ metric. By accurately evaluating the project, lenders can quickly assess the profitability. A third-party aspect in expensive projects such as land acquisition and development often helps the developers reaffirm their decisions. To mitigate the risks further, lenders limit the Development Finance cap at a certain percentage – usually 65 – of the GDV.
Apart from this intangible feature, there are other obvious features that Development Finance packages offer.

Easy

Unlike property mortgages, Development Loans are much easier to get. If you are an experienced developer, this process becomes even easier as lenders do take a favourable view on past successes. This, however, is not to say that inexperienced developers or first-time landlords can’t get a Development Finance package. Many lenders entertain the projects helmed by such borrowers, albeit at a lower percentage of the GDV.

Affordable

In comparison with many other financing products, Development Finance is more affordable. That the entire project acts as a security or collateral for the loan works in favour of all the parties involved.

Flexible

Most loans claim to be flexible in regard with term and stretch. Development Finance, however, takes these terms to a whole new level. A typical Development Finance deal we broker is termed over 12 to 24 months. Depending upon the requirements of the projects, the lender may also agree to add a loan term stretch on a case by case basis.

Convenient

Unlike conventional property mortgages, Development Finance is usually disbursed in instalments. Lenders prefer to assess the development of the project on a regular basis and directly reimburse the suppliers, personnel and service providers. This means that no time is lost between the lender agreeing to accept your application and the funds being made available to you.

Why Choose Commercial Finance Network’s Development Finance Services?

External financing is one of the most commonly used funding solutions in the UK. That said, it should be conceded that many businesses fail to make the most of these solutions. This often boils down to inappropriate funding options and contracts loaded in the lender’s favour. Development Finance is no exception to this. To avoid this, it’s important to know that you are getting a fair Development Finance deal.

Much the reason why, having a veteran, industry-leading whole of market broker like Commercial Finance Network handle your loan application can prove to be the difference. Unlike most Development Finance brokers in the UK, our brokerage services are 100% independent, fair and customer centric. From assessing the feasibility of your Development Finance application to matching the same with specialist lenders, we shoulder each and every responsibility.

We have rounded up below some of the prime reasons why our Development Finance services are preferred by numerous developers, landlords and businesses.

• Along with broking the best development loan deal, we also ensure that your project meets fair, reasonable valuation.
• We have on board a diverse panel of specialist lenders from across the UK. This allows us to match your application with an offer that is in tune with your exact requirements.
• Commercial Finance Network has established a formidable reputation in the UK commercial finance industry. Our track record, spanning over a highly successful decade, speaks for itself.
• Our team of Development Finance experts is always at hand to guide you through the minutiae of the process.
• We are one of the handful of whole of market brokers in the UK to offer round-the-clock customer service throughout the year.
• Over the years, we have managed to build an efficient network of local offices in every UK district. This means that our local representatives will always be approachable to take care of any and every query you may have.