Property development: benefits of working with an experienced broker

Here Cowgills Property Finance director, David Rainford looks at the benefits to developers of working with an experienced broker to maximise your chance of getting a firm and quick offer from a lender.

I am sure that any property developer would agree that picking your professional team – whether this be your Planning Consultant, Architect or Project Manager – can ensure that you maximise your profit through optimum design and build is critical to the success of a project.

Funding is no different and the wrong choice of lender can equally be costly. Processes can become protracted and time consuming, there is an inability for the lender to be flexible / commercial in its decision making and ‘In Principle terms’ and even ‘Offers’ can change or even be withdrawn at the last minute.

As we hopefully emerge from Covid-19 in the coming weeks getting the correct advice is going to be more important than ever before. Navigating the myriad of development lenders will be more challenging. Criteria and appetite will undoubtedly change, availability of liquidity to complete will come into even greater focus as will credentials of the lender.

Whilst the general market sentiment is that lenders want to get back lending, common sense says that they will focus on those schemes which are backed by a balanced and credible proposal. This is where an experienced broker earns their fees both in assisting with the proposal, supported by as much relevant detail as required, and advising on the correct lender(s) for the scheme.

My firm opinion is that a knowledgeable broker should:

• Add value to any presentation and take time in getting this right – a few lines on an email will illicit the same rushed response from a funder and will simply be so heavily caveated it will not worth the paper it is written on.
• Be able to draw on their prior experience of a funder and their track record on delivery – if they don’t know the funder that is a risk.
• Be capable of interrogating and challenging the information presented to them, as indeed the lender will. 30 plus years in banking and property finance have taught me to look at all applications from a lenders perspective and to present a ‘warts and all’ picture based on facts given it is far easier to mitigate issues at the outset rather than back tracking later.
• Not focus just on price in their assessment and recommendations – a cheap funding offer which is not deliverable is no good to anyone.
• Be honest and transparent throughout the process.

In summary

No two property developments are ever the same. There will be different timescales, different challenges and different financial requirements for each.  Deciding which product and provider is most appropriate for your circumstances can be bewildering and preparing the application can be complicated.

A well-presented application with the correct supporting information, pitched at the right level to a carefully targeted lender, is essential and will maximise a developer’s chance of getting a firm offer within weeks rather than months.

If you would like any further information please don’t hesitate to contact David directly david.rainford@cowgills.co.uk