Development Finance / Senior Debt

Features of Development Finance

• Finance for residential, mixed use, care homes, healthcare, commercial and hotel projects
• Coverage in England, Scotland & Wales
• Up to 70% LTGDV (higher with mezzanine/equity)
• Up to 100% LTC
• Joint venture and equity available
• Terms from 1 to 5 years
• Adverse credit accepted
• Rates from 0.34% p/m

As one of the largest brokers in the market, we have access to a comprehensive list of lenders and institutions globally – these lending decisions can be made on the same day in many cases which prevents developers and investors from missing out on opportunities in time-sensitive situations

Learn smarter and more efficient leveraging strategies

By minimising your own equity investment and maximising your gearing, you can use your own money more efficiently and increase your Return on Equity (ROE). By finding a product that helps you use your money more efficiently, you can reduce your risk in each development project and increase the number of projects in which you can invest. For the benefit of comparison, the following assumptions have been made:

• Total fee costs are consistent for each of the lending options
• The interest calculations assume that 50% of the construction facility is drawn for the whole term

Scenario 1 – No debt (100% equity investment)

• Total project costs – £1,975,000
• Debt facility – £NIL
• Equity invested – £1,975,000
• GDV – £2,570,000

The profit for the scheme will be
£2,570,000 – £1,975,000 = £595,000
ROE = £595,000 / £1,975,000 = 30%

Scenario 2 – Borrowing with a retail bank (at 65% of costs)

• Total project costs – £1,975,000
• Debt facility – £1,283,750
• Equity invested – £691,250
• GDV – £2,570,000

The profit for the scheme will be
£2,570,000 – £2,058,311 = £511,689
ROE =  £511,689 / 691,250 = 74%