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  • Writer's pictureDan Luxon

It's all about the rate... Isn't it?

When dealing with development finance or bridging one of the first questions we are asked is often "What's the best rate" and the answer is never simple. The rate conversation is in most circumstances not the most important question when looking for the most efficient funding for your project.

Every scheme is different, Lenders have wildly varying criteria and priorities and your situation as a borrower is unique. Getting the right deal for the right scheme with the right lender is a complex process.

Below are 4 key questions that we will always run through to determine what is the best deal for your specific scheme and personal situation.

1. Are you an experienced developer with a recent track record in a similar sized scheme?

  • All lenders like to see experience and many will insist on it. However there are always options if this is a first development or a larger scheme than previously built

2. Does your scheme stack up for the lender?

  • All lenders will want to see your workings, however the way that these are presented at the outset for each individual lender is fundamentally important and all lenders are different.

  • Depending on the market a Lenders view on build cost, contingency levels, GDV, acceptable gearing will change and it is imperative that you understand this before submitting a scheme.

3. What is your net worth and are there any skeletons in the cupboard

  • All lenders will want to know how you stack up personally. Some will immediately discount your application if they do not see enough liquidity or personal asset.

  • But again, there are always options, however getting the whole picture over to the right lender at the start is what will enable successful funding.

4. What is most important - gearing or cost, speed or rates, flexibility or certainty?

  • Understanding your priorities is paramount to getting the right lender involved. If you need the most you can get Day 1 and a development loan in weeks and not months we will be contacting completely different lenders than if you own the land outright and you wish to fund build costs only at a low loan to value.

The process of securing development funding can be tortuous with seemingly pointless hurdles erected by overzealous lenders and their solicitors. Our job is to make this process bearable and fundamentally to drive the best deal for your scheme kicking and screaming over the line!

If you are looking into financing your next scheme give us a call and lets see if we can help...

Give Dan a call any time

0n 07497 113341

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