How Much Can I Borrow
The maximum loan on property development finance is worked out using several figures. Firstly, the initial funding will be worked out on the loan to value (LTV) of the site. The lender will then consider the total borrowing in relation to the end value of the build, this is known as the loan to gross development value (LTGDV).
Finally, the lender will agree to fund a certain amount of the build costs, this is known as loan to cost (LTC).
When looking at commercial development finance, we can usually fund 55/65% of the initial acquisition costs and up to 60/65% LTGDV. Some lenders will restrict loan to cost, however, there are lenders who are willing to offer up to 100% LTC.
Roll Up Your Monthly Repayments
When taking out commercial property development finance, you can roll your monthly interest payments into the loan. This means there are no monthly repayments to make during the loan, subject to fitting the LTGDV criteria for the lender.
We are able to offer finance to both experienced and first time developers. If you’re looking to develop for the first time, we would highly recommend working with experienced professionals.
Whatever your situation, we will use our contacts across the market to secure the lowest commercial property development finance rates for you.
What We Fund Against
Commercial Development loans can be secured for the following:-
- Construction of industrial buildings
- Construction of office blocks
- Mixed residential and commercial schemes
- Refurbishment or conversion of shops
- Office to residential conversions
- Refurbishment Finance
- Pub to residential conversion
- Builds on farmland
- Land with planning for commercial property
The above list is not exhaustive, if your enquiry relates to a different scenario, get in touch and we will let you know exactly what we can offer.
Applying For Your Commercial Development Loan
- The first step before starting your application is calculating your costs, end value, profit margin and how long the project will take.
- Enquire online or call us on 01922 620008. We will talk through your potential application, taking down any relevant details.
- We will provide you with a full written agreement in principle. It will detail the interest rate, fees and headline borrowing terms, along with what documents are required to submit a full application.
- Once you have completed and returned the required documents, we will submit it to the lender along with a comprehensive report on the project.
- Once the lender has assessed the application, they will arrange to meet you on site. This gives them a chance to meet with you and to understand the project more fully.
- After the site visit has been completed, your lending manager will usually take your application to the credit committee. These are the underwriters who sign off the application as acceptable to the lender. Once approved, the lender will issue the formal offer, subject to valuation and legal work.
- A surveyor completes a report covering the current value, anticipated build costs, anticipated gross development value and expected demand.
- Your solicitor is instructed to carry out the legal work and satisfy all conditions. Once satisfied, you will sign the formal offer and return it to the lender. It is important that your solicitor is experienced in dealing with development finance as inexperience here can slow the process down significantly.
- The process is now ready to complete and the funds can be released. You are now able to start drawing on your loan and begin the development works.
Working With ABC Finance Ltd
At ABC Finance Ltd we work with commercial development finance lenders across the market. Our experience with commercial developments means we can secure the best terms for out clients quickly. By working with us, you can access the whole market through one enquiry.
From the first conversation, right through to completion, we manage the whole process for you. This means you can relax while we negotiate with multiple lenders on your behalf to secure the best terms.
Enquire online now or call us on 01922 620008 to get a fast personalised quote.