Finance for Property Developers & Investors

Finance for Property Developers & Investors

Thank you for downloading your Free Guide to the Top 20 Finance Products for Property Developers

We source finance across the full range of products required by property developers, namely:

  • Senior & Stretched Senior Debt
  • Mezzanine Debt
  • Equity, JVs & 100% Funding
  • Development Exit Finance
  • Bridging Finance
  • Investment Mortgages

There are literally dozens of lenders and investors operating in the market and it is fluid and ever changing. It would therefore be impractical to provide a complete database of all lenders and products so what we have done is given you a flavour of what is available; which we hope you will find informative. We will change the top 20 as new competitive products are launched so you may wish to bookmark the web page and dip in to view it from time to time.

At the foot of the page is a little bit about us and our contact details. If you wish to discuss a specific product or the market in general please do get in touch.

To find out more about Finance Products for Property Developers

Amount £1M to £35M
Location England, Wales
Property Houses, Flats, Mixed Use, Over 55, Student
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 70% (65% Student)
Day one LTV 75% value of land
Interest Rate - Band1 < 50% GDV 6.25% PA
Interest Rate - Band2 < 65% GDV 8.75% PA
Interest Rate - Band3 < 70% GDV 10.25% PA
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1 to 1.5% Facilty based upon LTV and term + Broker Fee
Exit fee 1 to 1.5% Facility based upon LTV and term
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s 20% build costs + 6 months interest
Underwriting Full Status, Experienced Developers
Notes Will allow Planning Gain in lieu of equity but will require 5% cash. Will allow Mezzanine 2nd Legal Charge but will require 5% cash. Will allow third party equity but will require and some cash from borrower, amount negotiable. Lender also offers Bridging, Pre Planning and Development Exit Finance.
Amount £1M to £50M
Location Central London Prime, Zones 1-6, Home Counties, Bath, Bristol, Birmingham, Cambridge, Oxford
Property Houses, Flats, Mixed Use, Over 55, Student, Hotel, Office
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 75%
Day one LTV 65% LTC/V net, but flexible
Interest Rate - Band1 < 65% GDV 0.58% per month (6.96% PA) + 1M Libor
Interest Rate - Band2 < 75% GDV 0.68% per month (8.16% PA) + 1M Libor
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1% Facility + Broker
Exit fee 1% Facility
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s Required, amount/type negotiablde
Underwriting Full Status, Experienced Developers, and those limited experience but with experienced team , overseas developers with experienced UK team
Notes Prime assets only. Residential with minimum £1000 per sq ft in London, £700 elsewhere. Other assets, prime only. Will allow mezzanine funder but require 10% equity in cash. Equity may come from a third party but some hurt money from borrower is preferred, though negotiable. Lender also offers Mezzanine (at c. 15% + PA) and Preferred Equity (at c. 20% + PA)
Amount £5M to £100M
Location England, Wales, Scotland
Property Houses, Flats, Mixed Use, Over 55, student, Office, Logistics
Construction New Build, Conversions
Loan to Cost 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 65% (possibly 70% but very strong project)
Day one LTV 70% value of the lower of purchase price or valuation
Interest Rate - Band1 < 50% GDV 5,65% + 1M Libor PA
Interest Rate - Band2 < 60% GDV 7.00% + 1M Libor PA
Interest Rate - Band3 < 65% GDV 8.00% + 1M Libor PA
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1% Facility + Broker
Exit fee 1 to 2% Facility
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s - below 60% GDV may waive, above 60% GDV required, amount and type negotiable.
Underwriting Full Status, Experienced Developers
Notes Have a niche for large flatted schemes in major conurbations. Will consider Student schemes in any location where there is demand. Speculative Office schemes to 55% GDV, subject to demand. New into the Logistics market. Will allow Mezzanine, equity from borrower negotaible. Will allow third party equitywithout investment from borrower.
Amount £3M to £25M
Location England, Wales, Scotland, Northern Ireland
Property Residential, Over 55, Student, Care, Hotel, Office, Others
Construction New Build, Conversions
Loan to Cost 85- 90%
Costs Include Land, Build, Fees,Statutory Payments, Finance
Loan to GDV 70%
Day one LTV 65% LTV
Interest Rate - Band1 8 to 10% PA, depending on LTV
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1- 1.5% Facility
Exit fee 1- 1.5% Facility
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG required, amount and type negotiable
Underwriting Full Status, Experienced Developers
Notes Loans on non residential assets will be at less than 70% GDV. Lender will allow planning gain in lieu of equity, will allow both mezzanine and third party equity, but in all cases will require some cash from borrower, amount negotiable. Student projects considerd in any location subject to dfemand. Also offer Bridging and Development Exit Finance.
Amount £1M to £20M
Location England, Wales, Scotland, NI, ROI, Channel Islands, Isle of Man, Gibralter
Property Houses, Flats, Mixed Use, Over 55, Student, Hotel, Office, Leisure. Any asset considered except Care and cautious with Retail.
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 65% Land, 100% build, finance to 65% GDV (maybe 70% for very strong covenant)
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 65% (maybe 70%) Residential, other assets negotiable
Day one LTV 65% MV
Interest Rate - Band1 Typically 12% PA
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 0.5% Facility on acceptance, 1% Faculty on drawdown, + Broker Fee
Exit fee 1% of Facility
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s Full Facility, charge over shares in SPV
Underwriting Experienced Developers, like quirky projects
Notes Flexible funder operating across several asset classes and locations. Like quirky deals that perhaps mainstream lenders don't. e.g. contaminated sites, offshore ownership, trusts, title issues etc. Will allow Mezzanine and third party Equity but will require some cash from borrower. Offer Bridging facility on land/assets requiring change or amendments to planning consent. Take full PG's but 100% net asset cover is not required. Also offer a rolling trading/aggregate facility for experienced Developers/Traders.
Amount £500k to £25M
Location England, Wales, Scotland, NI, ROI
Property Residential, Student, HMO, Over 55, Mixed Use and any Commercial Asset considerd, subject to liquiity and exit
Construction Light Refurb, Heavy Refurb, Conversions (small New Build Schemes considered)
Loan to Cost Negotiable but no more than 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 65%
Day one LTV 70% LTV (65% Commercial)
Interest Rate - Band1 Residential; Light Refurb 0.75% per month, Heavy Refurb & Conversion 0.9% per month. Commercial + 1 basis point.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1% Facility + Broker Fee
Exit fee Nil
Non Utilisation Fee N/A
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s amount negotiable
Underwriting Borrowers must demonstrate ability to complete works on time and within budget
Notes Flexible lender funding across a wide range of assets and locations. Products range from Residential and Commercial Bridging (from 0.65%and 0.83% per month respectively) to Light Refurb and Heavy Refrb/Conversions. For Light Refurbs the borrower must demonstrate liquidity to complete the works from own resources, for Heavy Refurbs/Conversions the lender will fund in tranches in arrears. Will consider small New Build projects and will refinancing partly completed/distressed projects. Will lend on a range of Commercial Assets, subject to liquidity and exit; pre sale/let is not necessarily required. Where works to properties are complete the lender will top up up facility to a maximum of 65% GDV, if required to allow for equity release. Will allow Mezzanine and Equity from third parties, and will consider even if borrower is not putting any cash in. Also lends in Spain, France, Germany, NL and in Euros and Dollars.
Amount £1M to £20M
Location Central London Prime, Zones 1-6, Home Counties, Bath, Bristol, Birmingham, Cambridge, Oxford
Property Houses, Flats, Mixed Use, Over 55, Student, Hotel, Office
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 75%
Day one LTV N/A
Interest Rate - Band1 1 to 1.5% per month, depending upon asset, LTV etc.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee 1% Facility + Broker
Exit fee 1% Facility
Non Utilisation Fee N/A
Security 2nd Legal Charge
Ltd Co/LLP 2nd Debenture, PG’s Required, amount/type negotiablde
Underwriting Full Status, Experienced Developers, and those limited experience but with experienced team , overseas developers with experienced UK team
Notes Prime assets only. Residential with minimum £1000 per sq ft in London, £700 elsewhere. Other assets, prime only Equity may come from a third party but some hurt money from borrower is preferred, though negotiable. Lender also offers Stretched Senior Debt and Preferred Equity.
Amount £1M to £2.5M (maybe a tad less or more) - so typically GDV range £6 to £15M
Location London, M25, and other major cities in England, enquire for details
Property Residential, Over 55, Student, Hotel, Commercial. Residential assets should not exceed £1M in value or £1000 per sq ft
Construction New Build, Conversions
Loan to Cost To 98% LTC (Mezzanine sitting behind Senior Debt), funded to 90% of funding shortfall, see comments
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV Negotiable
Interest Rate - Band1 Typically 20 - 25% PA
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure N/A
In fee Negotiable (included in facility so not paid by borrower) + Broker Fee
Exit fee Nil
Non Utilisation Fee N/A
Security 2nd Legal Charge
Ltd Co/LLP 2nd Debenture, PG, amount negotiable
Underwriting Experienced Developers; happy to consider those taking a step up to larger project
Notes Mezzanine slice where Senior Debt is in place, typically at 70-80% LTC (no higher) and Funder invests up to 90% of shortfall, with balance coming from Developer. For example; assume total project costs of £10M, with Senior Debt at 75% LTC that is £7.5 M, the shortfall required is 25%, or £2.5M. The Funder will provide 90% of this at £2.25M, leaving the Developer to source £250k, or 2.5% LTC. Typically, Developers are required to invest 2-4% LTC, sometimes a tad more for smaller, less profitable projects and for first time clients. Required project profitability is a minimum of 18% ROC after Senior Debt Finance. Project term up to 36 months. The Mezzanine debt is charges at 20 + % PA (typically low 20's). The Funder also offers this top slice to the same LTC by way of a JV on two structures; Standard Equity and Preferred Equity – see Equity ET001.
Amount £250k to £5M
Location England (not central London), Wales, Scotland, NI
Property Houses, Flats, Mixed Use
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 90%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 75% if strong, but typicaly 72-3% GDV
Day one LTV N/A
Interest Rate - Band1 From 17.5% at £250k, £16.5% at £500k to 15% at £5M
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up, compounded monthly
In fee 1.5% Facility + Broker Fee
Exit fee 1.5% Facility
Non Utilisation Fee N/A
Security 2nd Legal Charge
Ltd Co/LLP 2nd Debenture, PG’s mirror Senior Debt lender
Underwriting Full status, experienced Developers
Notes Keenly priced Mezzanine, lender is looking for long term relationships. Has arrangements with several key Senior Debt lenders. Maximum value of single unit £1.2M. Piggy back on Senior Debt valuer and PMS and mirror PG requirement. Will always require a minimum of 10% of project costs in cash from borrower, irrespective of any planning gain. Third party Equity is allowed providing it s uncomplicated and investor does not require shares in SPV. Lender is also a Developer and this gives comfort to the Senior Debt lender. Maximum loan to GDV includes Mezzanine coupon but generally excludes exit fee.
Amout £250k to £1.5M
Location England, Wales, Scotland, Northern Ireland.
Property Houses, Flats, Mixed Use with a small element of commercial. Maximum capital value £750k, maximum £ per sq ft sales value £750.
Construction New Build, Conversions, Heavy Refurb
Loan to Cost 95%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 75%
Day one LTV N/A
Interest Rate - Band1 From 1.2 - 1.6% per month (14.4-19.2% per annum)
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up, compounded monthly
In fee 1% Facility + Broker Fee
Exit fee 1% Facility
Non Utilisation Fee N/A
Security 2nd Legal Charge
Ltd Co/LLP 2nd Debenture, PG’s negotiable and capped.
Underwriting Full status, experienced Developers
Notes 95% LTC is very competitive, most mezzanine lenders cap at 90%. However the facility must not breach 75% GDV including interest accrual. Will allow third party equity but the borrower must have some cash in the project. Typically sit behind Senior Debt at c. 60% GDV
Amount £1M to £2.5M (maybe a tad less or more) - so typically GDV range £6 to £15M
Location London, M25, and other major cities in England, enquire for details
Property Residential, Over 55, Student, Hotel, Commercial. Residential assets should not exceed £1M in value or £1000 per sq ft
Construction New Build, Conversions
Loan to Cost To 98% LTC (equity sitting behind Senior Debt), equity funded to 90% of requirement, see comments
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV Negotiable
Interest Rate - Band1 See Exit Fee below and comments for details.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure N/A
In fee Negotiable (included in facility so not paid by borrower) + Broker Fee
Exit fee Option 1 - Standard Equity: 10% hurdle on investment to Funder, 10% hurdle on investment to Developer, then profits split 50/50%. Option 2: Preferred Equity; 50/50% split of profits. There is also a Mezzanine Option - see M002
Non Utilisation Fee N/A
Security Asset is owned jointly by Funder and Developer, pro rate to investment, see comments
Ltd Co/LLP PG for Cost Overruns
Underwriting Experienced Developers; happy to consider those taking a step up to larger project
Notes JV where Funder where Senior Debt is in place, typically at 70-80% LTC (no higher) and Funder invests up to 90% of equity requirement. For example; assume total project costs of £10M, with Senior Debt at 75% LTC that is £7.5 M, the equity required is 25%, or £2.5M. The Funder will provide 90% of this at £2.25M, leaving the Developer to source £250k, or 2.5% LTC. Typically, Developers are required to invest 2-4% LTC, sometimes a tad more for smaller, less profitable projects and for first time clients. Required project profitability is a minimum of 18% ROC after Senior Debt Finance. Project term up to 36 months. There are two profit share options available to the Developer. Option 1 - Standard Equity: 10% hurdle on investment to Funder, 10% hurdle to Developer on investment to Developer, then a profit share of 50/50%. Option 2 – Preferred Equity: no hurdles but a straightforward 50-50% profit share. (Note the 50/50% profit share in both options may fluctuate up to 10% either way, depending upon project profitability). An LLP is formed to buy the asset, the Funder owns 90% of this and the Developer 10%. The Senior Debt lender will take a 1st charge over the asset; the equity investment is therefore unsecured, but the Funder has the comfort of owning 90% of the asset. The Funder and Developer enter into a JV agreement. The Funder also offers this top slice to the same LTC by way of traditional Mezzanine (secured by way of 2nd charge – the Developer owns the asset) see Mezzanine Debt M002.
Amount £250k to £2.5M (GDV £1M to Negotiable)
Location England, Wales, Scotland
Property Residential
Construction New Build, Conversions, Heavy Refurbs
Loan to Cost 100%, sitting behind Senior Debt lender
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV To 100% LTC
Interest Rate - Band1 N/A
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure N/A
In fee Broker Fee
Exit fee Profit after Senior Debt split 50/50% with Developer
Non Utilisation Fee N/A
Security 2nd Legal Charge (so strictly it is Debt not Equity)
Ltd Co/LLP PG, amount negotiable
Underwriting Borrowers need to demonstrate the ability to build out the project on time and budget
Notes There are two strict requirements; 1/ the project must return a minimum of 27% ROS before Senior Debt Finance 2/ Project length must be no more than 18 months (build and sell). Maximum unit value £500k With a maximum loan of £2.5M, in theory a project with a total costs of £10M could be funded (assuming Senior Debt at 80% LTC) but the project length of 18 months will rule out larger projects. Lender will also fund whole of debt projects to 100% LTC between £250k and £2.5M on a 1st Legal charge Basis (i.e. with out a Senior Debt lender); the same profitability and project length criteria applies. Pricing; interest is charged at between 1 and 1.67% per month and the resulting profits split 50/50% with the Developer. See EW002.
Amount Projects with a GDV of £3M to £15M (equity slices from c. £250k to £1.5m)
Location Preference for London - South East but will consider major conurbations in England. Nothing too rural.
Property Residential houses and flats. Multiple units, no more than 25% commercial. Maximum capital value of units; London and Home Counties £500k, elsewhere £250k
Construction New Build, Conversions
Loan to Cost To 100%, sitting behind Senior Debt lender. For first time borrowers the lender may require a cash contribution of between 1-3% of project costs.
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV To 100% LTC
Interest Rate - Band1 N/A - the lender does not charge interest on the equity slice.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure N/A
In fee Nil Lender Fee, Broker Fee to be added
Exit fee Profit after Senior Debt split 50/50% with Developer
Non Utilisation Fee N/A
Security The asset is purchase in an SPV in the name of the lender. The Senior Debt lender has a 1st charge and the Developer enters into a JV agreement with lender.
Ltd Co/LLP PG, amount negotiable but normally mirror the structure of the Senior Debt lender (typically 20-25% of Facility).
Underwriting Experienced Developers.
Notes Maximum capital values per unit; London - Home Counties £500k, elsewhere £250k. Lender will procure Senior Debt with panel. Will sit behind Senior Debt, potentially up to 90% LTC. Lender may require 1-3% LTC cash contribution on first project. Project must return a minimum of 25% ROS before Senior Debt finance..
Amount Projects with a GDV of £3.5M to £20M (equity slices from c. £500k to £3.M)
Location England, Wales, Scotland. Nothing too rural.
Property Residential houses and flats. Multiple units, small commercial element acceptable. Prefer units within Help to Buy range but will-consider mid market units.
Construction New Build, Conversions
Loan to Cost To 100%, sitting behind Senior Debt lender. For first time borrowers the lender may require a cash contribution - typically 5% of equity slice which is c. 1% of project costs.
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV To 100% LTC
Interest Rate - Band1 12% PA charged on equity slice.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Charged and compounded monthly.
In fee Nil Lender Fee, Broker Fee to be added
Exit fee Profit after Senior Debt split 50/50% with Developer
Non Utilisation Fee N/A
Security The asset is purchase in an SPV in the name of the lender (99% of shares - Developer 1%). The Senior Debt lender has a 1st charge and the Developer enters into a JV agreement with lender re profit allocation and a JCT re construction costs.
Ltd Co/LLP PG for costs and interest over runs.
Underwriting Experienced Developers, and industry professionals entering the market with the appropriate experience and team.
Notes Sits behind Senior Debt lender, typically at no more than 65% GDV. Has a preferred lender panel and can make an introduction, but will consider existing developer - lender relationships.
Amount Projects with a GDV of £1M to £5M (equity slices from c. £200k to 500k)
Location England, Wales, Scotland.
Property Residential houses and flats. Multiple units, small commercial element acceptable. Maximum unit value preferably sub £500k but will consider larger if proven demand for asset.
Construction New Build, Conversions
Loan to Cost To 100%, sitting behind Senior Debt lender but the preference is for the borrower to cover the originator's fee (10% of equity slice, which is typically c. 2% LTC)
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV 75% to include Senior Debt finance charges and equity slice - may consider higher but the profit share will reflect the risk.
Day one LTV To 100% LTC
Interest Rate - Band1 Nil interest charged on Equity Slice.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure N/A
In fee Originator charges a fee of 10% of Equity Slice (no additional Broker fee payable for Equity). Preference is for borrower to pay this but will consider including it in the project costs if the project is very profitable - but the profit share will reflect this. .
Exit fee Profit after Senior Debt finance charges typically split 50/50% with Developer
Non Utilisation Fee N/A
Security Shares in SPV. Possibly a 2nd charge.
Ltd Co/LLP PG may be required.
Underwriting Experienced Developers, and industry professionals entering the market with the appropriate experience and team.
Notes Sits behind Senior Debt lender, typically at no more than 65% GDV. Has a preferred panel and can place the debt. Originator acts as both the introducer to and credit function for investor panel. Will lend to developers - contractors (with their own supply chain of trades) and where a third party contractor is appointed on a fixed price JCT. Fund enters into both a JV agreement for the profit share and a JCT for the construction. Minimum project profit margin required of 25% Return on sale before finance - may look at something a tad lower if short term project. Maximum project length 18 months.
Amount Projects with an approx. GDV of £5M to £15M
Location England outside of M25, Wales
Property Houses, Flats, Mixed Use with limited commercial, Over 55 if demand
Construction New Build, Conversions
Loan to Cost 100%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV 100% of purchase price
Interest Rate - Band1 12% PA
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly
In fee Broker Fee
Exit fee 40% of profits after finance, but may vary
Non Utilisation Fee N/A
Security Asset is owned by funder
Ltd Co/LLP PG from Developer £500k
Underwriting Experienced developers, industry professionals and contractors with an experienced team
Notes 100% LTC JV funding. Asset is purchased by Funder who contracts with Developer to build and sell at an agreed figures, thus determining forecast net profit, after interest coupon of 12% PA. Developer may act as contractor or appoint a third party contractor; either way a JCT will be required, with usual terms including build contingency of 5%. Developer will also enter into a JV agreement with Funder. Two SPV's are required, one for JCT (unless third party) and one for JV. Minimum number of units 8, maximum 35. Value of units not to exceed £500k (if a small number of the total exceed £500k it may be acceptable). Profits after finance are split 60% to Developer, 40% to Funder (may vary depending upon profitability of project). Project must return a minimum of 25% on sale before finance and including broker fee, lender's legal and PMS fees. Maximum term 22 months. PG of £500k required from the Developer for the capital only, so not for cost, interest overruns or loss of profit. The Developer does not have to have personal net assets to cover the PG. Funder has experienced in house team to assist with construction and marketing matters.
Amount £500k to £2.5M
Location England, Wales, Scotland
Property Residential
Construction New Build, Conversions, Heavy Refurbs
Loan to Cost 100%
Costs Include Land, Build, Fees, Statutory Payments, Finance
Loan to GDV Negotiable
Day one LTV To 100% LTC
Interest Rate - Band1 1% to 1.67% per month depending upon project.
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Charged and compounded monthly
In fee Broker Fee
Exit fee Profit after Senior Debt split 50/50% with Developer
Non Utilisation Fee N/A
Security Asset is purchased in an SPV which is owned by funder and Developer enters into a JV with funder to build the project in return for a share of the profits. RICS valuation not required (lender carries out due diligence).
Ltd Co/LLP PGs not required.
Underwriting Borrowers need to demonstrate the ability to build out the project on time and budget
Notes There are two strict requirements; 1/ the project must return a minimum of 27% ROS before Senior Debt Finance 2/ Project length must be no more than 15 months (build and sell). Maximum unit value £500k. Therefore this finance will only suit short term profitable projects (e.g. refurbs, conversions, smaller new build projects; perhaps where their is an in built profit margin from a planning gain etc.) . Lender will also fund top slice Equity projects to 100% LTC (sitting behind a Senior Debt lender) with Equity investments of between £250k and £2M on the same profitability and project length terms. See ET002.
Amount £500k to £5M
Location England, Wales, Scotland
Property House, Flats (New Build, Conversions), minimum of two units
Construction New Build, Conversions
LTV Gross 70% GDV
LTV Net 70% GDV if interest serviced by borrower
Interest Rate - Band1 8.4% PA (0.7% per month)
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly, or serviced monthly
In fee 1% Facility (+ broker fee)
Exit fee Nil
Minimum Term 1 month
Maximum Term 12 months
Repayment Profile 80% of value of sold unit retained by lender, 20|% retained by borrower (subject to agreement)
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s (amount subject to negotiation)
Underwriting Full status
Notes Lender also offers Development Funding to 90% LTC/ 70% GDV, at competitive pricing, and Bridging Loans to 75% LTV
Amount £500k to £15M
Location England, Wales
Property Houses, Flats
LTV Gross 75% LTV
LTV Net 70% LTV
Interest Rate - Band1 < 60% Net - 0.55% Per month
Interest Rate - Band2 < 65% Net - 0.60% per month
Interest Rate - Band3 < 70% Net - 0.65% per month
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within Gross Facility
In fee 1% Gross Facility + Broker
Exit fee Nil
Minimum Term 3 months
Maximum Term 12 months
Repayment Profile 100% of value of sold unit retained by lender
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG Full Debt
Underwriting Status
Notes Above pricing is for £500k to £1M; higher sums negotiable, possibly at a slight premium. Will allow mezzanine/2nd charge holder to remain in place, subject to a deed of priority. Lender/broker fees and rolled up interest are added to the Net loan, Gross loan not to exceed 75% LTV.
Amount £750k to £10M
Location England, Wales, Scotland
Property House, Flats (New Build, Conversions), will consider large single units
Construction New Build, Conversions
LTV Gross 75% GDV
LTV Net Determined by interet and fee retention from Gross loan
Interest Rate - Band1 < 55% LTV - 0.65% per month
Interest Rate - Band2 < 60% LTV - 0.70% per month
Interest Rate - Band3 < 65% LTV - 0.75% per month
Interest Rate - Band4 < 70% LTV - 0.8% per month
Interest Rate - Band5 < 75% LTV - 0.9% per month
Interest Structure Retained from Gross loan or serviced monthly by borrower
In fee 1% Facility (+ broker fee)
Exit fee Nil
Minimum Term 3 month
Maximum Term 12 months
Repayment Profile 100% of value of sold unit retained by lender
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s (amount subject to negotiation)
Underwriting Status but flexible
Notes Lender also offers Development Funding to 70% GDV and Bridging Loans to 75% LTV
Amount £500k to £10M
Location England, Wales
Property House, Flats (New Build, Conversions), minimum of two units
Construction New Build, Conversions
LTV Gross 70% GDV
LTV Net 65% GDV
Interest Rate - Band1 6.5% PA Fixed
Interest Rate - Band2
Interest Rate - Band3
Interest Rate - Band4
Interest Rate - Band5
Interest Structure Rolled up within facility and compounded monthly.
In fee 1.5% Facility (+ broker fee)
Exit fee Nil
Minimum Term 1 month
Maximum Term 12 months
Repayment Profile 100% of each unit sold to lender (may negotiate as LTV reduces)
Security 1st Legal Charge
Ltd Co/LLP No PG's required
Underwriting Full status
Notes Competitively priced Sales Period Finance with no PG's. Will allow equity release. Lender also offers Development Funding to 80% LTC/ 65% GDV, at competitive pricing.
Amount £250k to £4M (multiple units), £2M (single unit)
Location England, Wales
Property House, Flats (New Build, Conversions), HMO
Construction New Build, Conversions
LTV Gross 80% - 180 day MV
LTV Net Depends upon pricing and term of loan - see below
Interest Rate - Band1 6 month facility; 0.45% per month (months 1-3) - 1.25% per month (months 4-6)
Interest Rate - Band2 8 month facility: 0.49% per month (months 1-4) - 1.25% per month (months 5-8)
Interest Rate - Band3 10 month facility; 0.55% per month (months 1-5) - 1.25% per month (months 6-10)
Interest Rate - Band4 12 month facility: 0.59% per month (months 1-6) - 1.25% per month (months 7-12)
Interest Rate - Band5 For terms of 12- 18 months - by negotiation (probably on a flat rate for full term)
Interest Structure Calculated daily, charged monthly and retained for length of term
In fee 2% of Facility (no further Broker Fee)
Exit fee 1.25% Facility
Minimum Term 3 months (any unused interest will be refunded)
Maximum Term 18 months
Repayment Profile 100% of each unit sold to lender (may negotiate as LTV reduces)
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s full facility normally but may negotiate on low LTVs
Underwriting Status but flexible
Notes The split interest pricing structure is unique, and is suited to borrowers who plan to repay the facility within the discounted period. The 80% LTV (MV 180 day) is competitive. The lender is competitive, flexible and has a 'can do' attitude. The product can be used to repay Development Finance and the project does NOT have to be at practical completion (the client will have to demonstrate they have the resources to complete the works or funds can be earmarked from the facility.
Amount £250k to £4M (multiple units), £2M (single unit)
Location England, Wales
Property House, Flats (New Build, Conversions), HMO
Construction New Build, Conversions
LTV Gross 80% - 180 day MV
LTV Net Depends upon pricing and term of loan - see below
Interest Rate - Band1 6 month facility; 0.45% per month (months 1-3) - 1.25% per month (months 4-6)
Interest Rate - Band2 8 month facility: 0.49% per month (months 1-4) - 1.25% per month (months 5-8)
Interest Rate - Band3 10 month facility; 0.55% per month (months 1-5) - 1.25% per month (months 6-10)
Interest Rate - Band4 12 month facility: 0.59% per month (months 1-6) - 1.25% per month (months 7-12)
Interest Rate - Band5 For terms of 12- 18 months - by negotiation (probably on a flat rate for full term)
Interest Structure Calculated daily, charged monthly and retained for length of term
In fee 2% of Facility (no further Broker Fee)
Exit fee 1.25% Facility
Minimum Term 3 months (any unused interest will be refunded)
Maximum Term 18 months
Repayment Profile 100% of each unit sold to lender (may negotiate as LTV reduces)
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s full facility normally but may negotiate on low LTVs
Underwriting Status but flexible
Notes The split interest pricing structure is unique, and is suited to borrowers who plan to repay the facility within the discounted period. The 80% LTV (MV 180 day) is competitive. The lender is competitive, flexible and has a 'can do' attitude. The product can be used to repay Development Finance and the project does NOT have to be at practical completion (the client will have to demonstrate they have the resources to complete the works or funds can be earmarked from the facility.
Amount £500k to £15M
Location England, Wales, Scotland
Property Residential, HMO and non-standrad construction
Loan to Cost 90% but negotiable
Loan to Value 75%
Interest Rate - Band1 < 50% LTV - 0.55% - 0.69% per month
Interest Rate - Band2 < 60% LTV - 0.65% - 0.79% per month
Interest Rate - Band3 < 65% LTV – 0.70% - 0.84% per month
Interest Rate - Band4 < 70% LTV – 0.75% - 0.89% per month
Interest Rate - Band5 < 75% LTV – 0.80% - 0.94% per month
Interest Structure Calculated daily, charged monthly
Interest Payment Retained or serviced (subject to underwriting)
In fee 1% (+ Broker Fee)
Exit fee Nil
Minimum Term Negotiable but normally 1 month
Maximum Term 18 months
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s full facility normally but may negotiate
Underwriting Status but flexible
Notes Residential, HMOs and non-standard construction properties. For purchase or refinance. Lender permits light or heavy refurbishment, and minor development: structural, conversion or extension work that constitutes permitted development or for which existing planning permission is in place. Pricing within the LTV bands will depend upon asset, use, scope of works, term etc. Funds for works is provided by the borrower who must demonstrate liquidity and relevant experience. Depending upon nature of works, light touch quality control may be required by lender's monitoring surveyor.
Amount £250k to £4M (multiple units), £2M (single unit)
Location England, Wales
Property Residential (HMO, semi-commercial and commercial also considered)
Loan to Cost 80%
Loan to Value 80% - 180 day MV
Interest Rate - Band1 6 month facility; 0.45% per month (months 1-3) - 1.25% per month (months 4-6)
Interest Rate - Band2 8 month facility: 0.49% per month (months 1-4) - 1.25% per month (months 5-8)
Interest Rate - Band3 10 month facility; 0.55% per month (months 1-5) - 1.25% per month (months 6-10)
Interest Rate - Band4 12 month facility: 0.59% per month (months 1-6) - 1.25% per month (months 7-12)
Interest Rate - Band5 For terms of 12- 18 months - by negotiation (probably on a flat rate for full term)
Interest Structure Calculated daily, charged monthly
Interest Payment Retained for full period of term
In fee 2% Facility (no further broker fee)
Exit fee 1.25% Facility
Minimum Term 3 months (any unused retained interest will be refunded)
Maximum Term 18 months
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s full facility normally but may negotiate on low LTVs
Underwriting Status but flexible
Notes The split interest pricing structure is unique, and is suited to borrowers who plan to repay the facility within the discounted period. The 80% LTV (MV 180 day) is competitive. The lender is competitive, flexible and has a 'can do' attitude. The product can be used to repay Development Finance and the project does NOT have to be at practical completion (the client will have to demonstrate they have the resources to complete the works or funds can be earmarked from the facility.
Amount £250k to £10M
Location London, South East, Home Counties, Midlands, North, North Wales
Property Residential, HMO, Commercial
Loan to Cost Negotiable - lend on value but will always want minimum cash contribution of 10%
Loan to Value Residential 70 - 75% MV 180 day. Commercial will be lower but depends upon asset.
Interest Rate - Band1 Residential < 50% LTV - 0.75% per month
Interest Rate - Band2 Residential > 50% LTV - 0.85% per month
Interest Rate - Band3 Commercial to 65% LTV - depends upon asset
Interest Rate - Band4 Note: also offer another pricing option for periods of 12 months + . See Notes
Interest Rate - Band5
Interest Structure Calculated daily, charged monthly
Interest Payment Usually serviced monthly, maybe retained.
In fee NIl Lender fee (Broker fee to be added)
Exit fee Nil
Minimum Term Nil (interest charged daily)
Maximum Term 12 months on this product but see notes for longer term product
Security 1st Legal Charge
Ltd Co/LLP Debenture, PG’s full facility normally but may negotiate
Underwriting Status but flexible
Notes Competitive (no lender fees so suitable for short term borrowing), flexible, fast, efficient lender with a simple application and underwriting process. Also offer another option, which is suitable for terms of 12 months or more. In fee 1% Facility, interest 5.5-6% over 3 month Libor, exit fee 1% Facility. Also offer Development Finance to 60% GDV at the same pricing.

To find out more about Finance Products for Property Developers

Gary Walsh proprietor of Optima Property Funding

About Optima

Gary Walsh, proprietor of Optima Property Funding, has provided information in FAQ format on what the business does, the market it operates in and how it works with property developers to broker finance.

Who is Optima Property Funding and what do they do?

 

Optima Property Funding (Optima) is a finance brokerage that works with property developers to arrange funding for their property projects.

 

We broker the full range of products required by property developers namely:

 

  • Senior & Stretched Senior Debt
  • Mezzanine Debt
  • Equity, JVs & 100% Funding
  • Development Exit Finance
  • Bridging Finance
  • Investment Mortgages
Optima are based in Central London and broker finance for projects in England, Scotland, Wales, Northern Ireland and Republic of Ireland. As a rule of thumb we have a minimum loan size of £500k for 1st charge Development Finance (Senior and Stretched Senior Debt), £250,000 for Mezzanine and Equity slices and £500,000 for Development Exit Finance and Bridging Loans. There is no cap on the maximum loan we will broker and we place cases running into £Multi M.

 

See Product Pages for full details.

 

Do Optima broker FCA Regulated Business?

 

Optima is regulated by the FCA (Financial Conduct Authority) and therefore does broker FCA regulated business where the borrower is non – incorporated and the debt is secured by a 1st legal charge on land.

 

Therefore we are able to broker finance for a wide range of legal entities to include Limited Companies, Partnerships, Limited Liability Partnerships, Sole Traders, Trusts, and Offshore Vehicles.

 

We do not broker finance where the property is the residence of the borrower (MCOB Regulated Mortgage Contract)
Who is behind the name?
 

The proprietor is Gary Walsh who spent twenty five years in banking including the last six of those years in a senior position in the property finance division of a large bank. Gary is a professionally qualified, having passed the recognised ACIB (Associate of the Chartered Institute of Bankers) examinations.

 

After leaving banking, Gary set up the brokerage in 2003.

 

Gary has also undertaken a handful of property development projects thus gaining hands on experience of the challenges!

To find out more about Finance Products for Property Developers

Do Optima have any industry accreditation?
 
Optima is a full member of the NACFB (National Association of Commercial Finance Brokers); a recognised and reputable body. Optima abide by the code of conduct of the NACFB.
Optima hold both Financial Conduct Authority (FCA) Permissions and a Data Protection Licence. Details can be seen at the foot of the web site.
How do Optima operate, what fees are charged and when are they payable?
We have set out below the typical process we follow when brokering finance for a project.
Initial enquiry by phone or e mail Nil Free consultation
Indicative quotation provided by Optima Nil Free, no risk to client
Optima submit to/discuss with lender(s) who issue Heads of Terms/ AIP Nil Free, no risk to client
Full Fact Find by phone or face to face Nil Free, no risk to client
Optima / Client agree and sign Terms of Business Nil Free, no risk to client
Optima submit full application to lender Nil Free, no risk to client. The market norm is that the client pays a commitment fee at this stage
Lender issues Offer of finance (which may be subject to valuation and other conditions) Nil Free, no risk to client. The market norm is that the client pays a commitment fee at this stage
Client accepts lenders offer of finance Nil Free, no risk to client
Optima work with all parties (lawyers, valuers etc.) to complete due diligence Nil We have a vested interest in facilitating the process to ensure drawdown of funding
Drawdown of the facility 100% of the Broker Fee This fee is only payable if the deal completes to drawdown of the facility
We operate the following transparent and fair policy on fees:
We agree a fee with a client for the project, normally in line with our tariff but subject to negotiation on larger deals and for repeat or volume business.
Our tariff is competitive.
We disclose and rebate any procurement fee we receive from a lender. So for example let us say that we agree to charge a client 1.00% for raising £3M on a project. If the lender pays us a procurement fee of 0.5%, the client would pay only the balance of 0.5%. Therefore in essence we don’t accept lender procurement fees and hence there can be no issue of any conflict of interest.
We do not charge an upfront commitment fee with submission of the full application to the lender. Most brokers charge a non-refundable commitment fee which can range from £500 to many £’000’s.
We do not charge a fee on the issue, or acceptance of a lenders offer letter. It is common practice for brokers fees to be legally due (included in their Terms of Business) at offer stage even if in practice they are collected at drawdown of the finance. If the project aborts without completing, many brokers will pursue the client for the fee.
Our fee is paid in full upon first drawdown of the loan and hence it is in our interest to work with all interested parties (our client and their solicitor, lender and their solicitor(s), valuer, QS etc.) to get the project over the line.
A copy of our Terms of Business and our Tariff is available upon request; we do not make it available on line as we do not wish our competitors to see it!

We work with many satisfied property developer clients, some of whom have provided references which you can view on the Testimonials page of the site and who if contacted, will vouch that as well as being both professional and competent, we are competitive and fair in our fee policy.

Regards,

Gary Walsh ACIB
Director
Optima Property Funding Ltd
Suite 206,
54 - 56 Victoria Street,
St Albans, AL1 3HZ