DEVELOPMENT FINANCE

Development finance is a type of funding designed for individuals, businesses, or property developers looking to finance property development projects. Whether you're building new homes, converting commercial properties into residential units, or undertaking large-scale renovations, development finance provides the necessary capital to cover the costs of land acquisition, construction, and other associated development expenses.

How Development Finance Works:

Secured Loan: Development finance is secured against the property or land being developed, meaning the lender holds a charge on the asset until the loan is repaid.
Stage Payments: The loan is typically provided in stages, with funds released as specific milestones in the development are completed, such as the completion of groundwork, the erection of the structure, or the finishing stages of the build.
Interest-Only Payments: During the development phase, borrowers usually make interest-only payments, with the capital loan repaid once the development is completed or sold.

Key Benefits of Development Finance:

Tailored for Developers: Development finance is specifically designed for those undertaking property projects, whether residential or commercial, making it a flexible and suitable option.
Access to Significant Funding: Development finance allows you to access large sums of money to fund your project, including costs for land, materials, labor, and permits.
Flexibility in Loan Use: It can be used for a wide range of projects, from building new homes, converting or refurbishing properties, or undertaking large-scale residential developments.
Progress Payments: The loan is released in stages, meaning you can access funds as you reach important milestones in your development, ensuring cash flow throughout the project.

Things to Consider:

Higher Interest Rates: Like other forms of property financing, development finance tends to have higher interest rates than traditional mortgages due to the risk and complexity of the projects involved.
Clear Exit Strategy: Lenders will want a clear exit plan for how you intend to repay the loan, typically through the sale of the developed property, refinancing with a long-term mortgage, or another form of repayment.
Project Management: Development projects require effective management, so having a detailed plan and experience (or a trusted team of professionals) is crucial to keeping the project on track and within budget.
Risk and Uncertainty: Development projects can involve risks, including delays, planning issues, or changes in market conditions that may impact the profitability of the project.

How to Apply for Development Finance:

Speak to an Expert: Contact one of our mortgage advisors to discuss your development project and determine the appropriate financing options.
Prepare Your Project Plan: Develop a clear plan that outlines the scope of the project, expected costs, timelines, and your exit strategy.
Submit Your Application: Provide your financial details, the property’s details, and a comprehensive development plan.
Access Funds in Stages: Once approved, funds will be released based on the progress of your development, allowing you to keep your project moving forward.

Is Development Finance Right for You?

Development finance is ideal for experienced property developers or individuals planning significant property projects, including:

New Builds: Constructing residential homes or commercial properties.
Conversions and Renovations: Converting a building, such as a warehouse, into residential units.
Large-Scale Projects: Funding for large residential or mixed-use developments.

If you're planning a property development project and need finance, development finance can provide the funds you need to turn your vision into reality. Our expert advisors can help you navigate your options and secure the best development finance deal for your needs.

Get in touch with us today to discuss your development finance requirements and explore the best options available for your project.