100% Development Finance
One of the leading development lenders has announced a new product which will provide 100% finance of all costs on a joint venture basis.
The important point to note is that it is a joint venture not a straight secured loan. The quid pro quo is 100% finance and you have a lender being paid on completion of the project so they are fully committed to you.
The outline criteria look like;
- Work with experienced developers.
- Projects would be multi-unit residential new build or conversions in the mid-price bracket.
- Project length should be no more than 24 months.
- Full planning permission must already be in place
- GDV target of £2m – £10m. GDV per unit should be no more than £700K for Home Counties and £400K for other areas.
- Interest is charged on a blended mix of senior and mezzanine elements which is competitive.
- We work to ROCEs (Return On Capital Employed).
- Profit is divided between JV partners, typically it’s 60/40% in the developer’s favour.
- We will hold the asset in a brand new Special Purpose Vehicle (SPV).
For developers considering projects that fit the above then this may be an option worth considering. The expected timescale from submission to offer is 28 days.