Top tips for securing development funding
The UK property market has been surprisingly strong in light of Brexit concerns. We have actually seen a sustained interest in property development, with developers looking to expand and develop quickly with the help of funding.
So, what funding methods are available?
From senior debt to stretched senior, mezzanine and equity providers there are more lenders in the market than ever before and with appetite to fund schemes in the North West.
No two property developments are ever the same. There will be different timescales, different challenges and different financial requirements for each and identifying the best lender suited to your scheme and obtaining support can often be a challenge.
In 2018 our property finance division helped SME housebuilders to build in excess of 350 new homes in the region and secured debt funding for development and investment transactions in excess of £150 million. Our joint venture company PMJ Capital, which provides funds directly to trusted housebuilders and developers, has provided over £30m of funding since its inception in 2015. So there is certainly plentiful funding available.
Here are my top five tips to securing development finance
- 1) Be frank in your dealings and present a ‘warts and all’ picture based on facts. It is far easier to mitigate issues at the outset rather than back tracking at a later date.
- 2) Demonstrate your experience and that of your team through previous and current projects.
- 3) Support your case through appraisal based evidence and comparable sales and cost information with back up from your professional team.
- 4) Accept that demonstrable ‘skin in the game’ will be essential.
- 5) Be realistic in your expectations on pricing relative to the risk profile.
In summary provide your information in a well-presented application with the correct supporting information, pitched at the right level with a carefully targeted lender.
For assistance or advice do not hesitate to contact David Rainford on 01204 414243.
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