Understanding Development Finance
Fund your property projects with development finance, whether you are constructing a brand new property or refurbishing an existig one. Funds can be released all at once or in stages over the maximum 12 month period as and when you need it. Development finance can be a great way to keep the cost down instead of accepting one large sum at the start of the project.
Understanding the basics of how development finance works, including the what it is, how it works and what it can be used for.
What is Development Finance
Development finance is a type of loan used to fund property projects, such as construction, refurbishment, or conversion. It provides the necessary capital to cover the costs of the project.
How it Works
Development finance is a short-term loan that is typically repaid within 12 months. Funds can be recieved at the start of the project or at stages as the development progresses.
What it Can Be Used For
Development finance can be used for a variety of property projects, including new builds, conversions, refurbishments. It can help cover the costs of materials, labour, and other expenses associated with the development.
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Benefits of Development Finance
Discover the benefits development finance and determin if it can be an appropriate financing solution for you.
Versatility
This type of finance can be used for a wide range of property projects, including new builds, property conversions, extensive refurbishments, and large-scale developments.
Flexible / Tailored Options
Development finance offers flexible and tailored solutions to meet the specific needs of each project, allowing borrowers to choose the most suitable terms and repayment options.
Faster Access to funding
Provides quick access to funds, allowing borrowers to start their projects sooner and avoid delays in construction or refurbishment work.
Minor Upfront Costs
Other than a deposit, no upfront costs are required, allowing borrowers to preserve more of their cash for other investments or project expenses.
Potential Drawbacks
Explore the factors to consider when choosing development finance and determine if it is the right financing option for you.
Higher risk
Compared to other forms of financing, such as a bank loan. Development finance can be riskier due to the property or asset being used as collateral.
High Interest Rates and Fees
Because this type of finance is considered high-risk, interest rates and fees may be higher than other financing options, such as traditional mortgages or personal loans.
Strict Lending Criteria
Lenders may have strict lending criteria, including minimum credit scores, income requirements, and other eligibility factors that borrowers must meet to qualify for development finance.
Dependent on Future Finance
The repayment of the loan is often reliant on the property being sold or longer-term finance being obtained which means that if this is not obtained the asset or property may be repossessed.
Making Development Finance Simple!
*This information is intended as a general guide only and should not be considered as a recommendation or advice regarding the suitability of any particular bridging option for your situation. All options are subject to the applicant(s) meeting the specific eligibility criteria of the lender. We recommend scheduling an appointment for personalised bridging advice tailored to your individual needs and circumstances.