Property Development Finance Broker | From £100,000 to £100m (2024)

Written by:Sam O'Neill&Sam Hodgson

When looking for finance for a property development, there are several compelling reasons to use a property development finance broker, rather than trying to find funding by yourself:

• Speed – Brokers have established relationships with lenders and know which are most likely to approve funding for you. They also know the common road blocks that can hold up an application. This means you can usually get funding much faster using a broker.
• Access to a wider range of lenders – Many development finance lenders are intermediary-only, meaning they are not available directly to the public. To access the full range of potential lenders, you will need to use a professional development finance broker.
• Get the best deals – An experienced broker will know which lenders are currently offering the best rates and what you can do to make sure you get those rates. They will also know whether a particular loan offers good value or not, including all of the potential costs and fees which may not be immediately obvious to non-professionals.
• One less thing to worry about – Any property development requires you to be on top of hundreds of different details and processes. Allowing a development finance broker to find your funding for you gives you one less thing to worry about, allowing you to focus your efforts elsewhere.

Call ustoday on 0203 900 3040 to discuss your requirements.

Or get a quote and rate comparison tailored to your development project:

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Case study: £4.3m development finance with no exit fee

A commercial property developer had acquired a disused commercial building to convert into 77 student flats. The developer had funded the purchase and the cost of securing planning with a bridging loan.

The loan term for the bridging loan was ending and the developer needed to raise £4.3million to repay the existing loan and fund the conversion work. They needed a quick solution to avoid delaying the start of the project and leaving them unable to repay the original loan.

Our property development finance brokers quickly found a specialist development finance lender who was able to offer the full £4.3million as a new bridging loan secured against the site. This was based on a Gross Development Value (GDV) of £7million.

We negotiated for 65% of the funds to be released on day one, allowing the client to repay the existing bridging loan and begin construction work straight away. The loan came with a 12 month term, lowinterest rate and no exit fee when the loan term ended, helping to maximise the developer’s profits.

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The Role and Benefits of a Development Finance Broker

A development finance broker plays a vital role in the property development industry by serving as a go-between for property developers/investors and lenders.

They facilitate the financing process, leveraging their extensive network of contacts within the finance industry to connect developers with suitable lenders. This enables borrowers to reliably secure financing terms for development projects, such as ground-up development, light refurbishment loans, and heavy refurbishment loans.

With that said, we’ll go through exactly what a broker can do for you during your search for favourable development finance. Additionally, highlight the many benefits a broker can provide as well as how to receive help and advice with the development finance application process.

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Understanding Development Finance

What is a Development Finance Broker?

What can a Development Finance Broker do for you?

Are the Benefits of a Development Finance Broker Worth the Expense?

Can I Approach Development Finance Lenders Directly?

Can I Get 100% Development Finance with the Help of a Broker?

Looking for a Broker for Development Finance?

FAQs

Understanding Development Finance

Development finance plays a crucial role in funding various projects, including property development, construction, and infrastructure ventures. This can be for both residential and commercial property.

This type of finance provides property investors and developers with the capital to complete their property projects.

What is Development Finance?

Development finance refers to a type of specialised funding for property projects. These are short-term secured loans, with high-interest rates, and access to a drawdown facility throughout the loan term.

Development finance is designed to provide the necessary capital for the purchasing of a development site, land, or property. After purchasing, 100% of the development costs can also be funded throughout the development lifecycle i.e. from land acquisition to completion.

This form of financing caters to the unique requirements and complexities of development projects, offering tailored solutions to meet the funding needs of both developers and investors.

What is a Development Finance Broker?

A development finance broker is a professional who specializes in securing financing for property development projects. They act as intermediaries, bridging the gap between developers and lenders.

By leveraging their industry connections, they identify suitable lenders and negotiate favourable terms on behalf of a client.

What can a Development Finance broker do for you?

Development finance brokers offer their guidance and assistance in securing development finance.

At Clifton Private Finance, we specialize in tailored financing solutions for various development projects. Here are some examples of the steps we take to assist borrowers:

• Consultation & Assessment – Schedule an in-depth discussion to assess project details, including scope, timeline, planning permissions and financial needs. We can evaluate your eligibility and identify suitable development finance options.
• Lender Selection – We’ll find competitive lenders offering favourable rates and terms for development finance. This ensures selection options are aligned with your property project requirements.
• Application Preparation – Development finance can involve a great deal more documentation than a traditional mortgage, or bridge loan. We can assist in gathering the necessary documentation, financial statements, and project plans to create a strong loan application. A broker can help you highlight project strengths to increase your chances of approval.
• Lender Negotiation – approaching lenders directly can be challenging – especially when it concerns a specialised finance type. We can be an advocate on your behalf when negotiating terms like interest rates, drawdown facility, and repayment options.
• Approval & Funding – Facilitate the loan approval process by addressing additional lender requirements. Once conditions are met, lenders release funds for the development project.
• Ongoing Support – Provide continuous support and expert guidance throughout the development process, including refinancing options and project management.

Ultimately, getting the help of a broker will streamline the financing process, ensuring clarity and efficiency while maximizing the chances of securing optimal funding for your development project.

Are the Benefits of a Development Finance Broker Worth the Expense?

A development finance broker is an invaluable resource when it comes to securing financing for your property development project. Through them, you’ll have access to the best rates from UK lenders.

At Clifton Private Finance, we operate on a fee basis, which is calculated as a small percentage of the loan amount. Our fee structure typically ranges up to 2% of the loan amount.

A development finance broker can save you time and ensure a smooth process for large projects. They find and negotiate with the right lender quickly. They handle the paperwork and address finance organisation issues on your behalf. Their expertise streamlines the process and maximizes your chances of success.

Find a broker for your development project to save time and ensure a hassle-free experience. Let them handle paperwork and negotiations while you focus on your project's success.

Can I Approach Development Finance Lenders Directly?

While it is possible to go directly to lenders, it is not advisable. Although development finance can be sourced from traditional banks, it is considered a high-risk and specialised type of finance – typically better sourced from specialist lenders.

Specialised lenders typically only deal with brokers as an intermediary.

With a complicated property development project on your hands, you may not want the additional worries of dealing directly with lenders.

Additionally, development projects are perceived as high-risk ventures by traditional lenders due to market volatility, construction challenges, and changing regulations. This caution often results in lenders being hesitant to provide the required financing. Without putting your best foot forward, and without the advice and guidance of a development finance broker, you may be putting your application in jeopardy.

By partnering with development finance brokers, you may be able to get flexible terms and negotiate a favourable rate. Moreover, developers can explore alternative avenues and make informed decisions to ensure the success of their projects.

Can I get 100% Development Finance with the Help of a Broker?

A development finance broker can help you source finance at 100% of development costs. However, this can be a challenge depending on the complexity of your property project.

It helps to have an expert broker to connect you with lenders who are willing to offer this type of financing for eligible development projects. Without a broker, this can be very difficult.

Keep in mind that the cost of servicing a 100% loan will be higher, and lenders will still assess various factors such as the project's viability and your financial situation. You may need an additional asset, or assets, alongside the security i.e. the property or development site, in order to be eligible for that type of loan.

It's recommended to consult with a broker to discuss your specific circ*mstances and explore the available options – we can help you get loans up to 100% of development costs through our network of specialist lenders.

Looking for a Broker for Development Finance?

When it comes to securing financing for your property development project, finding the right development finance broker is crucial. At Clifton Private Finance, we specialize in providing expert assistance in the field of development finance.

With our extensive expertise and knowledge of the development finance market, we can connect you with lenders who specifically cater to your unique requirements. We can support refinancing options and additional mezzanine finance for development finance projects.

Our personalized service ensures that we understand your project's scope, timeline, and financial needs. By leveraging our access to the whole market, we can secure the most competitive rates for you, tailored to your circ*mstances.

With the guidance of our experienced team, you can make informed financial decisions and obtain finance at an affordable and favourable rate.

Contact us today at 0117 959 5094 to explore how our development finance broker services can benefit you. Book a consultation, and let us assist you in obtaining the necessary financing for your project.

FAQs

Can a Development Finance Broker help me with Bad Credit?

A development finance broker can point you to lenders that specialise in working with borrowers with bad credit. Despite the challenges of securing development finance with a poor credit history, a broker has market knowledge and connections with different lenders, increasing your chances of finding a suitable solution. Consulting with a broker or financial advisor is advisable for personalised advice based on your specific situation.

How long does it take to secure development finance?

The speed at which you can obtain development finance will vary, but in some cases, short-term finance can be obtained in as few as seven working days.

What are the interest rates for development finance?

The interest rates for development finance usually vary between 4.5% and 9%, and they are determined based on factors such as the project's level of risk and the borrower's experience.

Find the best property development finance deals

Clifton Private Finance is a UK-based, FCA regulated property development financebroker. Our property development finance brokers have great relationships with all the leading UK development finance lenders, so can help you find the best property development finance deals quickly and with minimum fuss.

Call us today on 0203 900 3040 to speak to a member of our property development finance brokerteam.

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