As with any finance, it's possible for borrowers to 'cut out the middle man' by applying directly to a lender, so why do so many developers go via a broker instead? A skilled broker provides real benefits at every stage of the process, as Paul Keddy explains...
Stage 1: Initial discussion
However you get in touch, be that by phone, email or online chat, we begin by assigning you a specialist property development finance consultant who will work with you throughout the entire process. Your consultant will have an initial discussion with you about the project you have in mind - be prepared for lots of questions, as the more information you provide us the sooner we can establish whether the finance you require can be achieved. We are able to assist in financing a wide range of projects, including:
- new build sites, whether large or small
- conversions of commercial premises to flats
- major (or minor) refurbishment works
Formal development finance is typically used for projects requiring a loan of £500,000 or more, while smaller developments are typically funded using short term finance (also known as bridging loans).
If you have any special borrowing requirements, for example if you are under time pressure to complete a chase, then this is when you should let us know. You will also be asked for:
- A summary of the development including location, type of development, purchase price or current land value, loan amount required, build timescales and your planned exit route - commonly sale of property or refinance to a term facility
- Details of any previous development experience
- Details of your current occupation
As a whole of market broker we have access to the full spectrum of lenders, from high street banks to the specialists, many of which will only offer development finance through their intermediary partners. They all take a slightly different approach to development finance, with their attitudes to different circumstances manifesting in the criteria they look for, the security they require and the rates they charge.
If we believe we can help, it is at this point we will provide you with an indication of the type of rate and terms you can expect to be offered. As expert intermediaries, we'll place your case directly with the lender that is best placed to assist you. We know which lenders will and won't look to assist with a given project, and we won't waste your time chasing unrealistic prospects. Of course, the opposite is also true - some lenders are willing to bend their criteria in the right circumstances, and our history of working with these lenders allows us to spot when and where this is possible.
But what if we can't help? In this case we will give you an honest answer as to why this is and let you know what you can change to improve your chances.
Stage 2: Applying for finance
If the terms seem acceptable to you, we will help you put together a proposal. Property development is a highly bespoke type of finance, with rates and availability depending heavily on the strength of the project. Lenders will therefore ask for a detailed overview of the development to be provided on application, and will use this to decide whether they're willing to lend and on what terms.
This is another major advantage of using a broker like Mortgages for Business. As we have years of experience of processing similar cases, we know what the lenders are looking for. We will work with you to produce a high quality, tailored proposal that emphasises the strength of your project and addresses any concerns the lender may have. Putting together a strong proposal like this maximises your appeal as a client, and can make the difference between receiving a market-leading rate and having your application declined outright. Don't worry, we do all the hard work, you just need to support us by providing the required information and documents. We can then review the information and present this in a way that will satisfy a lender that the project is sound.
Stage 3: Securing the loan
After submitting an application, we will keep working to secure you an offer as quickly as possible, keeping you informed every step of the way. We'll go with you to meet the lender to discuss the project in more detail, and we'll use our strong working relationships with the lenders to negotiate on your behalf.
So whether you're an experienced developer with a new and ambitious project, or just starting out, we can direct you to a suitable lender and work with you to maximise the appeal of your project. For help financing a development, or to find out more, you can call me directly on 01732 471655 or email me at email@example.com.
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19th September 2017