Becoming a developer is a potentially lucrative and satisfying career, but securing financing for property development can be a headache. Although there are myriad considerations when arranging loans for property development, here are 3 key points you should consider.
Purchasing the site
This stage involves more than just finding a site and securing a loan for it; especially if you are an inexperienced developer, there are many pitfalls to consider here. If you find a site, you may be under time constraints to purchase it—this is where short-term finance can help. You’ll also need to conduct thorough research, both into the land itself and the sort of lenders who will work with the plot. Many lenders, for example, won’t work on sites that have reputational issues such as casinos.
Organising your cash flow
Developments move in stages, so when you’re organising finance for property development, you’ll need to consider what you’ll need at different points. Issues can often be unexpected, too—you’ll know in advance that you need to pay contractors and buy materials, but it isn’t always easy to plan for problems that arise out of nowhere. Fortunately, our experience with development lenders mean we have access to facilities to help you through these patches.
Refinancing on completion
Especially if you’ve used a short-term finance solution, you may need to consider refinancing on completion of your development project. Your current loan may have a high interest rate, or you may wish to release funds to begin your new project before your previous development has sold. Some developments take a long time to complete, so the market may have changed since you began your project; it could be a while before you find an appropriate buyer.
Financing for property development
Enness Development are a market-leading development finance broker. With connections at every level of the market, we will be transparent and efficient in sourcing the best lender and terms for your circumstances, whether you are a first-time developer or an established firm. If you’d like a further discussion of what we can assist you with, don’t hesitate to get in touch.