A Guide – Development Finance

Development Finance Application Submission

Submitting an application for development finance involves a detailed and structured process, primarily because these loans are typically larger and carry more risk than standard property loans. Here’s how you can approach the application process:

Step 1: Prepare Your Project Proposal

• Project Overview: Create a comprehensive overview of your project, including location, size, type (residential, commercial, mixed-use), and the total number of units.

• Development Costs: Provide a detailed breakdown of all development costs, including land acquisition, construction, professional fees (architects, surveyors, legal), and any contingency funds.

• Projected Sales or Rental Figures: Offer evidence-based projections of the end value (Gross Development Value – GDV) or rental income of the project. This often requires market research and comparables.

• Timescale: Outline the projected timeline for the development, from start to completion and sale or refinance.

Step 2: Compile Essential Documents

• Planning Permission: Include copies of any planning permissions granted

• Architectural Plans: Detailed architectural plans and specifications for the development.

• Construction Budget: A detailed construction budget, including quotes from contractors and costs for materials.

• Professional Team Details: Information about your development team, including architects, builders, and project managers, highlighting their experience and past projects.

• Financial Projections: Detailed financial projections, including a cash flow forecast for the development phase.

• Personal or Business Financial Statements: Including asset and liability statements for the developer or development company.

• Exit Strategy: Clear explanation of your exit strategy, whether through sale or refinancing.

Step 3: Find a Lender

• Research Lenders: We will look for lenders with experience in development finance specific to your project and with a track record of funding similar projects.

• Initial Discussion: We will reach out to potential lenders to discuss your project informally. This can help gauge their interest and get feedback on your proposal.

Step 4: Submit Your Application

• Formal Application: Complete the lender’s application form, attaching all required documentation. Ensure all information is accurate and well-presented. Don’t worry, we will help with all this !

Step 5: The Review Process

• Valuation and Due Diligence: The lender will conduct their due diligence, which may include a site visit, valuation of the proposed project, and a review of the financials and development plans.

• Loan Offer: If the lender is satisfied with the valuation and due diligence, they will issue a formal loan offer, outlining the terms and conditions of the loan.

Step 6: Acceptance and Legal Process

• Acceptance: Review the loan offer carefully and accept if it meets your needs.

• Legal Process: There will be a legal process to go through before funds are released, including any security that needs to be put in place.

Step 7: Monitoring and Drawdowns

• Project Monitoring: Lenders typically release funds in stages based on the progress of the development. Regular monitoring and reporting may be required.

• Drawdown Requests: Submit requests for drawdowns as per the agreed schedule, providing evidence of project progress and expenditure.

The application process for development finance is thorough and requires detailed planning and documentation. Lenders need to be confident in both the viability of the project and the ability of the developer to successfully complete it. Having a clear, detailed proposal and being prepared for each step of the process can significantly increase your chances of securing development finance.

We are here to help you at every step of the process, contact us to book initial consultation