Development Finance

The loan is structured in line with the borrower’s build programme (in months). After practical completion is reached (say after 18 months), a further period of time, e.g. 3 to 6 months is modelled into the Loan Structure, so as to afford a sales period. I.e. to provide the borrower with a period of time to either achieve the sale of the completed units, or if they are retaining the property, to allow for a refinance to occur. In this example, the loan would be modelled over a 24-month period, breaking back to 18 to build and 6 to exit.

Development finance is a short-term funding option and at Assetz Capital we lend up to 36 months. It is designed specifically to assist with the purchase and build costs associated with a residential or commercial development project.

This can be a new build, conversion or refurbishment covering a single unit through to multiple units built across a number of phases.

Development finance is typically made available in two phases. Firstly to purchase the development site. This could be land where a number of new properties will be built or an existing property that will undergo a refurbishment.

Then secondly the funds are used to pay for the costs of the build works associated with the project. This is usually drawn in stages, as opposed to being given in one amount at the outset. This typically happens once a month as works are completed on the project and the monitoring surveyor involved has validated the works.

Once your project is up and running, the construction or refurbishment cost part of the loan is drawn down in stages (usually monthly). How much is drawn down will depend on the value of work completed on site that month. The benefit of drawing down amounts monthly is that you’ll only pay interest on the total amount drawn at that point in time.

The Independent Monitoring Surveyor (IMS) will act as the ‘eyes and ears’ on the project for the lender to make sure works are progressing on time and on budget and will flag any potential issues. They will be acting for Assetz Capital as the lender, but their costs will be payable by the borrower. Our dedicated Development Monitoring Director, Jonathan Witter, will be on site with you on a regular basis to work through any issues you may have as well as managing the external IMSs.

With development finance from Assetz Capital you can borrow between £1-50 million on a staged drawdown basis.

We will accept a maximum LTGDV of 70% (Including interest) or a higher value with additional property security.

We specialise in the funding of care homes and PBSA (Purpose Built Student Accommodation.)   Ground-up development, conversion, refurbishment & reconfiguration of residential property (houses & apartments) & owner/occupied, pre-sold or pre-let commercial property.

First legal charge (plus debenture and a level of personal guarantee for corporate borrowers), as well as associated construction related security, such as Collateral Warranties (if applicable).

Limited companies & LLPs can apply for development finance with Assetz Capital.

There are a number of different ways that you can repay your development finance. Such as by –

• Repaying the full amount  using sale proceeds from the finished property or properties.
• Refinancing on to a long-term loan  if you plan to keep the finished development or to rent it out.
• Refinancing using development exit bridging finance   to crystallise profit at a lower rate and potentially fund another future project without having to wait for the sale of the current one.

Our process explained PDF will take you through each step of our development finance  process and show you just how straightforward it is.

Residential (houses & apartments) & pre-sold/ pre-let commercial (some element of speculative commercial development can be considered). Modular are also acceptable.