Property Development Finance Return to all services
If you are planning a building project you may well be in need of finance. As well as covering new build developments, property development finance also covers renovation and property conversions.
A basic criteria for obtaining a loan is that you will need some capital – typically 25% of the build costs, unless you are able to offer additional security to the lender. You may, for example, have another property with no mortgage which you could offer to the lender as security.
The lender will also want to see confirmation that you have planning permission for the work, so it is important to obtain this before applying for finance.
With property development finance, it is normal for the funds to be drawn down in stages after your own contribution to the project has been spent. The lender may require evidence of the work completed from a surveyor or architect before they release the next tranche of funds.
A beneficial feature for many property developers is that property development finance can be arranged on an interest only basis, with lenders generally allowing the option of the interest owed being rolled up. This means monthly interest payments do not need to be made. Whilst the overall loan outstanding at the end will be higher, this feature allows you to keep your outgoing down when finances could be tight.
If you require property development finance we can help. We can source the most competitive options for you, including those available through Dupree Commercial Finance Ltd., to find you a competitive deal.