Choosing the Right Development Finance Product
When we talk about development finance, we're talking about a massive range of projects and funding providers. From large-scale commercial developments to residential new builds and individual refurbishments through to rental market renovations.
There are, therefore, lots of different development finance products on the market. The ideal product for you will depend entirely on what work you're planning, what sort of property it is, and how much you need to borrow.
Let's run through the most common products, whom they're suited to, and what costs you can expect to pay.
For further advice about selecting the most appropriate development finance, or applying to the suitable lenders who specialise in your sort of construction project, give us a call!
The Revolution Brokers development finance team is available on 0330 304 3040 or send us an email at info@revolutionbrokers.co.uk and let us know when you'd like to talk.
100% Housing Development Finance / Joint Venture Development Finance
First, let's look at 100% development finance.
Of course, the 100% means that the lender is putting up all of the cash needed to develop the property - and so you'll share the profits with them.
You will each have a 50% profit share in most cases, although that can vary depending on interest charges. It's essential you're clear and satisfied with the profit share agreement before any paperwork is signed since you'll be tied into the joint venture and won't usually be able to revisit this.
Most developers won't make any repayments during the loan term, and the interest will be rolled up with the capital balance and need to be repaid in full.
Therefore, venture finance is an attractive solution for developers with excellent prospects without the cash available to put down as a deposit.
This type of development finance includes, usually, 100% of both the initial purchase costs and the development costs.