Development Finance UK

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Financing your Development Project

A network of advice services helping you with funding requirements and business protection on your development projects

Need a principal lender to support your development plans - contact us for advice and arrangement

Senior Debt

there are a number of lenders whom we could approach to be the 'principal lender' for that project.

This lender, or in some cases this group of lenders, will hold the Senior Debt position on your project and will secure that debt on the capital value of the site.

In most cases, they will expect that you will already have acquired the site ready for development and they will then be able to release funds to you during the various stages of the development according to the business plans and cash-flow projections agreed at the outset.

In some instances, a Senior Debt holder will be prepared to contribute funds toward the purchase of the site but it is rare for their contribution to exceed 60%. They will also take a view on the developed value of the project and will often be prepared to meet the full cost of the development work as long as their total exposure to risk does not exceed 60-65% of the total developed value.

Lenders also need to know your exit route from development finance. Do you intend to retain the property(ies) post-completion in order to receive rental income? Do you intend to sell some or all to obtain a capital return?

Some lenders are willing to convert their development finance into a longer term, standard commercial mortgage post-completion. Others will require that you repay the finance within a short period either by refinancing or by sales.

Lenders tend to specialise in certain areas where they have the most expertise and comfort. As a result, it is necessary that any applications are steered toward those specific lenders that could or would support your project.

Contact us for our advice on the best way for you to proceed.