Development finance and leverage is a fundamental part of the process when delivering new homes in the UK as well as internationally.
Here are five important things to consider before going ahead with your development finance application.
Please do not be completely led by the headline rate when you are looking into development finance. Ultimately, it’s about the total cost of borrowing. The numbers don’t lie but they can be misleading if you don’t delve into the detail. That’s where specialist advice can help when you are looking into development finance options.
We have many scenarios where the finance is relatively cheap. However, the leverage is usually capped at a reduced level. This leads to a fundamental question: do you need to make your equity work harder for you?
Is the lender predominantly a bridging lender that has recently moved into development finance? As development deals and construction are complex, it’s key that the right partnership is being formed. You should find an expert who has a track record of finding the right development finance structure.
Does your lender deliver the funds in the required timescales? People need to be paid so it’s paramount that this is being delivered as soon as possible. That is another reason why an experienced specialist is going to add value. They have the required knowledge of the process and well-established relationships with lenders and banks to get the solution across the line quickly.
Have you considered all of your potential options? The development finance market is fairly vast. It’s likely that there are multiple options out there, maybe even more than initially anticipated. Hence the importance of working with a whole of market brokerage that advises as opposed to just executing. If you are restricted to a smaller panel of lenders you may not get the best development finance deal.
Find out more about Development Finance Options
Why not get in touch with our specialist team at Mesa Financial to discuss your requirements? We are experienced at helping developers finance their projects with the right solutions. You can read about some of these examples in our development finance case studies.