Traversing the initial learning curve that accompanies a development finance application can be tricky. If you have not applied for a development loan before, you have no frame of reference and therefore have no idea what to expect.
This is where many investors and developers shoot themselves in the proverbial foot; they dive in headfirst without any real thought. With these types of loan applications, the devil is in the detail and advance planning really is everything.
Specifically, several forms of evidence must be provided to support your application, which your lender will expect to see right off the bat. In terms of the development itself, you will need to submit the following as a bare minimum:
- Financial Appraisal– Your financial appraisal needs to be as in-depth and recent as possible, including a full unit-by-unit GDV breakdown. Should any changes occur in the interim, your lender must be made aware of them as promptly as possible.
- Valuation Evidence– A formal valuation of the development, conducted by a surveyor recognised and approved by the lender you are looking to work with. Again, the valuation should be as recent and a detailed as possible.
- Plans and Planning Consent– It will also help to support your application if you can issue a copy of your planning permission to your lender, along with a copy of your plans for the development. Your lender will want to carefully consider the terms and conditions attached to your granted planning permission before making their decision.
- Contractors – If third-party contractors are going to be involved in your project, you will be expected to provide details of them to your lender. However, this may be an aspect of the project that is yet to be finalised, calling for flexibility on the part of the lender.
In addition to the above, the following will are also be required in relation to the applicant:
- Full CV and Details of Experience– Your lender will want to see formal evidence of your established track record as a property developer. This evidence does not need to go into extensive detail, but should instead convince them at a glance that you are an established professional in your field and are therefore a safe bet.
- Financial Information– Providing as much financial information as possible is essential to add weight to your application. This usually tends to be a fairly contentious area that involves extensive questioning and scrutiny, but is nonetheless the primary make-or-break factor for most lenders.
By its nature, every development finance application will be 100% unique. It is therefore essential to enlist independent broker support at the earliest possible stage, in order to present a convincing case to your chosen lender.
Your broker will not only help you find a suitable lender for your project, but they will also advise on alternative funding options that may be available. All while negotiating the best possible deal on your behalf and adding priceless credibility to your application.
About the Author:
Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO agency and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, UK Property Finance, Serimax and also supported UK doctors, solicitors and property developers, gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships
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