Development Finance
Whether you are an experienced Developer or someone embarking on their first development,
Commercial Finance London can arrange the necessary facilities to fund you project.
Development Finance
Commercial Finance London can arrange finance for:
- Residence new builds
- Purchase & Conversion/Extension/Alteration projects
- Purchase & refurbishment/Improvement projects
The financing package may be structured in one of three ways depending on the individual Developer’s own capital contribution to the overall project cost and their experience in residential development.
- 70% of the site cost + 70% of build cost
- 70% of site cost + 100% of build cost
- 100% of entire project cost – site + build.
This way of funding is often required on a first project in the circumstances where the developer has little or no capital to contribute BUT can contribute “in kind” to partially underwriting the risk, ie: he has equity in freehold property, e.g. His main residence, which can be offered as additional collateral to enable the funding source to advance money over and above the normal level and
secure their interest by way of 1st or 2nd charge for the duration of the project ONLY
Each development project will be carefully considered on merits, but as a general benchmark the applicant developer must demonstrate that his proposal is realistic, sensible, viable, profitable, will be are scrutiny, and that there is a defined exit from the funding commitment within a reasonable period of time according to the size and nature of the project.
Interest chargeable on the development loan will be “rolled-up” and repaid along with the principal sum from proceeds of sale of the completed development.
Occasionally, depending on the risk management of the project, the funding source may require a profit share of up to 50%
Security will take the form of 1st legal charge over the site plus a personal guarantee, and in the case of funding requirements up to 100% of the project cost, a 1st or 2nd charge over additional collateral offered for that purpose.
Our standard criteria for each proposal before an “in-principal” offer can be obtained is:
Our standard criteria for each proposal before an “in-principal” offer can be obtained is:
- Completed development loan application
- Completed confidential Asset & Liability Statement for the applicant
- Competed development Finance Appraisal, including projected cash flow
- Copy Planning Permission
- Copy Location Map
Evidence of development end value(s) based on local comparables, and confirmation of market demand in the area – this can be obtained from the Estate Agent who will be instructed to market the completed unit(s).
Evidence of any pre-sale, for example off-plan subject to contract.
Details of any special purchase conditions including timing.
Apply now and get an answer within hours – not days and have the money in your bank account within a few weeks NOT MONTHS
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