News from Bricks

Property Developers Short Term Loan Guide

Published by Will Michelmore, May 2021

You’ve found the perfect development site and need to source funding. Traditionally you’d ask your bank manager for funds. But what do you do if you don’t have a bank manager, or if your bank says ‘no’?

Finding the right lender for you: A good way to find a suitable lender is through personal recommendation or by appointing a broker to find one for you. Make early contact with them and present sufficient information to enable a full assessment of your project. Too many great schemes struggle to get the right funding either because the proposal has not been presented properly or the wrong lender has been selected.

3 factors your lender will want to know:

  • Borrower background: Borrowing entity, previous experience, employment or business history, assets & liabilities.
  • Scheme: Site location, planning permission, plans & elevations, cost appraisal & cashflow, schedule of Gross Development Values (GDV), supporting sales agent’s advice and comparables, details of the construction team, details of any site specific risks or non-standard construction methods.
  • Security: The lender will require a 1st legal charge over the site. Any restrictions on the site? Any deferred consideration?  If borrowing via a company, personal guarantees will also be required from the directors/shareholders and possibly a mortgage debenture.

All lenders will have a maximum Loan to Value (LTV) restriction and occasionally makeweight security can be considered to support higher borrowing subject to a clear and viable repayment route.

A responsive lender will contact you within a day or so with an indication of funding appetite and terms and an early credit decision shortly after. Many lenders will require a Red Book Valuation as a condition of approval. Upon acceptance of the lending offer, and valuation where required, both parties instruct lawyers to undertake usual property due diligence to perfect the security package.

Where the security package is non-complex the legal process should take a matter of weeks. To avoid any undue delays or surprises it is prudent to make the lender aware of any known title restrictions, boundary or right of way issues, leases and/or specific buyer obligations, from the outset.

Not all lenders are the same: Monitoring of the development progress and spend against budget is critical for both the developer and the lender to ensure scheme success and address any issues as they arise. Many lenders will appoint a third-party surveyor, at the borrower’s cost, to monitor the project and authorise tranche loan development draws.

When you apply for a development loan at Bricks Finance, we like to meet all our clients and visit the sites. That is why we only offer development finance to sites in the South of England and Wales, near to where we live.

We have a wealth of experience with property development and so fully understand the risks and opportunities. We pride ourselves on being supportive funding partners and on providing straightforward and flexible loan solutions. We do not insist on Red Book Valuations or monitoring surveyors and this can be a significant cost saving during the life of the project.

Trust and understanding are priorities for Brick Finance so that we can work together throughout the build, side by side, to ensure its success for both of us and minimise the risk of failure.

Click the Contact us button for more information.

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Clive Banks

founder and investor

Will Michelmore

founder and investor

Jerry Rihll

founder and investor

Tracey Abbott

head of lending

Harry Dawson

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What our customers say

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Oli, Property Developer

Devon

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Thank you so much for everything you have done to help us secure this purchase. We are finally looking forward to a good night's sleep now!"

Stuart and Emma, Dream Home Purchase

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Nick, Solar Energy Park

Somerset

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Darren, Land Purchase

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Bricks have given me the support I needed to do this. I couldn’t be happier to see it going up before my very eyes."

Russ, Beach House Development

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Bricks have been amazing. Without them, I doubt we would have saved the pub for the village."

Becky and John, The Rose and Crown

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When the guys from Bricks say they are going to back you they do, and it has been a real pleasure partnering with them on this project."

Matt, Property Development

Devon

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I was really pleased with how quickly I had access to finance. I would recommend them to anyone looking to raise finance."

Jon, Property Development

Somerset

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I’d really recommend Bricks Finance for anyone who needs to raise finance. They just allow you to get on and make things a success."

Dave and David, Property Development

Devon

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I will be forever indebted to you all (thankfully no longer financially!) for taking a punt on somebody looking for a leg up in a new industry."

Alex, Forest Holiday Village Development

Cornwall

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We found like-minded people who were prepared to take the time to understand our business and support our student accommodation in Exeter."

Angus & Alison, Landlords

Devon

Landlord Mortgage

I feel like Bricks is part of our team and wants a successful outcome for us as much as we want it."

Sam, Property Development

Devon

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Having used Bricks myself, I now feel comfortable referring clients who have similar needs. The beauty of Bricks is their speed, flexibility and being FCA regulated so they can provide regulated and unregulated loans."

Geoff, Finance Broker

Somerset

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Bricks are so easy to deal with; they get involved and take an interest in the project all the way to completion."

David, Finance Broker

Cornwall

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We’d love to hear from you. Whatever your enquiry give us a ring or send us an email and we’ll respond as soon as possible.

Bricks Finance Ltd

Winslade Park

Manor Drive

Exeter, EX5 1FY

United Kingdom

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