Introduction to Property Development Finance

• Property development finance is a type of funding used for development projects, including new builds, conversions, and refurbishments of existing properties.
• It’s designed for experienced property developers and can provide up to 100% of the development costs.
• Property development financing can be used for residential, commercial, or mixed-use projects.
• Development finance is typically short-term, with loan terms ranging from 6-24 months.

Types of Property Development Finance

• There are several types of property development finance, including development loans, bridging loans, and joint venture partnerships.
• Development finance can be used for ground-up new builds, conversions, or refurbishments of existing properties.
• Gross development value (GDV) is a critical metric in development finance, as it determines the amount of funding available.
• Experienced property developers can access development finance for a variety of projects, including residential units, commercial properties, and mixed-use developments.

Development Finance Team and Process

• A development finance team typically consists of experienced professionals, including lenders, brokers, and solicitors.
• The development finance process involves several stages, including application, assessment, and approval.
• Development finance solutions are tailored to the specific needs of each project and borrower.
• A development finance calculator can help borrowers determine the costs and feasibility of their project.

Development Project Financing Options

• Development project financing options include development loans, bridging loans, and mezzanine finance.
• Development loans can provide up to 100% of the development costs, while bridging loans can provide short-term funding for projects.
• Mezzanine finance can be used to fund the gap between the development loan and the total development costs.
• Experienced developers can access development finance for a variety of projects, including residential, commercial, and mixed-use developments.

Bridging Finance and Loans

• Bridging finance is a type of short-term loan used to bridge the gap between two transactions, such as the purchase of a property and its subsequent sale.
• Bridging loans can be used for development projects, including new builds, conversions, and refurbishments of existing properties.
• Bridging finance can provide up to 100% of the purchase price, subject to the loan-to-value (LTV) ratio.
• Experienced property developers can use bridging loans to fund their development projects.

Development Finance Costs and Fees

• Development finance costs and fees include interest rates, arrangement fees, and exit fees.
• Interest rates for development finance can range from 4.5% to 15% per annum, depending on the lender and the project.
• Arrangement fees can range from 1% to 3% of the loan amount, while exit fees can range from 1% to 2% of the loan amount.
• Other costs and fees associated with development finance include valuation fees, legal fees, and quantity surveyor fees.

Applying for Development Finance

• To apply for development finance, borrowers must provide detailed information about their project, including the development costs, projected income, and exit strategy.
• A development finance application typically involves several stages, including initial assessment, credit check, and approval.
• Experienced property developers can increase their chances of approval by providing a comprehensive business plan and financial projections.
• A development finance broker can help borrowers navigate the application process and secure the best funding option.

Development Finance Risks and Considerations

• Development finance involves several risks, including construction risks, market risks, and financial risks.
• Borrowers must carefully consider these risks and develop a comprehensive risk management strategy.
• Experienced property developers can mitigate these risks by working with a reputable lender and development finance team.
• A development finance calculator can help borrowers determine the feasibility of their project and identify potential risks.

Development Finance for First-Time Developers

• First-time developers can access development finance, but may face stricter lending criteria and higher interest rates.
• A first-time developer can increase their chances of approval by providing a comprehensive business plan and financial projections.
• Experienced development finance teams can provide guidance and support to first-time developers.
• Development finance for first-time developers can be used for a variety of projects, including residential, commercial, and mixed-use developments.