Present your Application in an Understandable Way Before Financing Development Projects
If you are trying to explain budgets and figures, this needs to be laid out in a simple way to read.
Scribbled notes, jumbled figures and vague descriptions are very likely to result in a rejection.
There are many ways to construct your development finance application to look professional, and it is much easier for a lender to evaluate.
- Use a spreadsheet to present figures.
- Make sure drawings or illustrations are labelled and marked.
- Spell check your text and ensure it is accurate.
Development finance rates depend heavily on the quality of your application. Therefore, it is well worth spending time finessing your application to ensure it's approved and you are offered attractive rates.
Give Revolution Brokers a call if you need any support with putting your application together.
Our highly experienced consultants have years of knowledge about the best way to present your development finance plans. They are on hand to provide bespoke advice to ensure your application clearly demonstrates your development aspirations.
Don't Overstate Your Development Experience of Housing Development Finance.
It's normal to want to exaggerate your experience to improve your chances of approval - but lenders will verify any experience you mention.
They will usually ask for property details and images, so the lender will find out if you don't disclose that it is your first development.
False claims on an application will be an immediate rejection.
While experienced developers usually have a more straightforward application process, you won't always be automatically turned down if you have a good development project in mind. However, the lender needs to see the potential to make a sizable return on their investment.
However, exaggerating your experience will almost certainly pose a substantial problem, so it's essential to be honest and transparent in all the information you provide.
Don't forget that you don't need to have a full-scale commercial build under your belt to demonstrate some level of development experience!
Even domestic renovation projects involve a great deal of project management and budget control, so be sure to include all relevant experience that will contribute to your application.
Be Realistic with your Estimates for Development Finance Rates
As with experience, a lender will check and evaluate everything on your application - including possible sale prices.
If a project looks to have excellent margins, it will be of more interest.
Still, the lender will look for the valuations of similar properties in the area and quickly identify if the projections given are not viable.
Development finance projects with a substantial profit margin estimate might look more attractive on paper. Still, any lender will look to verify the risk profile of the development, including research into the primary figures included on your application.
It's essential to do your homework and provide three examples of other property sales or listings that indicate what you expect to achieve for the sale of your completed build.
You can use a range of properties as evidence. Still, they should be as close in design to your project as possible and always in the local area, given the significant property market pricing variations in different UK regions.
Work Out Your Budget Thoroughly Through a Property Developer Finance Calculator
Lenders will need to know the overall build costs and how you will spread those costs over the project duration.
Break down the costs month by month right from the start, and a lender will have more confidence that you will be able to manage the cash flow.
For example, a lender will not be content with one overall budget figure. They'll want to know:
- How that cost is arrived at, and what you expect to draw down from your development finance facility at each significant stage of the build.
- How much you are investing into each part of the process, and then how much you're expecting to borrow from your development finance lender.
- When each stage is expected to be complete - the project lender will usually require an independent valuation at each step to confirm the progress is on schedule and that the requisite works have finished before they release the next batch of funds.
- Who will be carrying out the work? Especially if you're new to developing properties, including details of experienced contractors, architects and surveyors will strengthen your application.
If you're in any doubt as to your total borrowing required, it's wise to go back to the drawing board before you approach a development finance lender.
Clear budgets, precise schedules of work and credentials of the professionals who will be working with you are all critical to improving your chances of approval.
By following these steps, you present a thorough, accurate and viable development finance application that stands the best chance of approval and secure competitive rates that won't eat into your development project profits.
For more support with submitting your application, or identifying the suitable lenders to apply to, contact Revolution Brokers on 0330 304 3040 or email us at [email protected].
2023-05-09 
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