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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Experience, standing by you
Founded in 2014 with over 90 years of combined property, finance and legal expertise, the Bricks Finance team help local people to access finance easily and quickly by offering bespoke lending using their own funds as well as those from investors.
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What our customers say
Thank you for partnering with us on this project. It's been great to have had a knowledgeable funder who understood the project and allowed us to get on with doing what we do."
John & Sam, Property Development
I wanted a reasonable fixed rate of return with low risk. I like the way my money is combined with money from the other investors, the founders and their families to diversify the risk and to make loans in the South West."
Mrs B, Lyme Regis
It has been fantastic working with you all and we’ve appreciated your advice, support and efficiency throughout."
Vicki and Peter, Property Development
I invested because I trust the people behind Bricks and they are able to give me a much better rate of return than my bank. I like their business model and the way they focus on providing support for local businesses in the region which they know and understand.”
Mr R, Senior Partner with a Global Law Firm
I invested in Bricks over four years ago and have increased my investment several times since. The fixed rate of return is far better than anything available with the high street banks and I like to see where my money is being invested."
Mr A, Exeter
I love the fact that my money is being used constructively on projects throughout the South West and that I can see the tangible benefits that Bricks offers to both borrowers and investors."
We became investors in 2019 and invested more this year because we get a far better rate of interest and regular interest payments.”
Jeff and Karen, Exeter
Congratulations for the help you are giving to West Country businesses and your good stewardship of the investment funds.”
Peter and Gillian, Devon
The final part of my land assembly purchase has now completed. You made the whole financing aspect so easy from start to finish. Thank you all so much."
Ady, Loan For Land
I'm so happy and want to thank you with all my heart - you have enabled me to buy the property of my dreams!"
Chloe, Property Loan
We cannot thank you enough for helping get this over the line and the life-changing opportunities that are now on the horizon"
Jill, Property Finance
Thank you again so much for being completely brilliant. Thank goodness there are people like you, Clive, Will, Jerry and Lyn out there."
Tracey, Home Finance
Personally, I found the service from Bricks 11/10 in every aspect, and I would highly recommend."
Oli, Property Developer
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
This would not have been possible without your support and faith in us to deliver the project. Bricks Finance took the time to understand it. It has made an amazing difference to our lives."
Nick, Solar Energy Park
This is our second deal and again we have achieved the first drawdown within 6 weeks from start to finish which is impressive!"
Richard, Finance Broker
Being able to purchase the site would not have been possible without the backing of Bricks."
Darren, Land Purchase
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
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
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