Joint Venture Finance For Experienced Developers
If you are an experienced property developer and have funds tied up in existing sites, several funding options are available for your next property development.
You could take out a development exit loan on your existing project(s) to release some working capital. If that isn’t possible (or you don’t have any current projects), then Fox Davidson can secure 100% development finance.
What Is 100% Development Finance?
100% development finance, also known as joint venture development finance, allows a developer to fund a scheme without putting in any of their own funds. In order to get to 100% of total costs, we will utilise senior debt, mezzanine finance and equity which may come from one or several lending houses.
100% Development Finance Key Criteria:
- 100% of all costs
- Senior debt with an approximate rate of 11%/12% all in
- No arrangement fee and no exit fee
- Equity piece for remainder of the funding loaned with no interest, and loaned out first so that your initial funding attracts no interest
- Minimum loan £1m and maximum £5m (ideal loan size £2.25m)
- 1% Fox Davidson fee for advice and facilitating the debt
- 20% profit on costs post finance
- House and flats
- Part commercial is OK
- NO QS FEES – as funder has in house QS
- The site must have full planning permission in place and be located in the South of the UK
The Developer must have:
- 2 recently completed prior schemes (similar to the proposed scheme)
- PG and assets of developer = 25/30% PG and assets in the background of approx. 50% of the loan required but negotiable, your assets need to be able to support the PG comfortably.
Fox Davidson
Fox Davidson work with private funds to secure 100% development finance and joint venture funding for successful, experienced property developers.
We will work with you to complete the necessary documents and prepare a comprehensive lending proposal. To get started please call us on 01179 897950, email enquiry@foxdavidson.co.uk, or alternatively, please complete our enquiry form.
Is development finance regulated?
Development finance is not regulated by the FCA. Property is built to be sold or retained as an investment (buy to let).
Can you get a mortgage on a development property?
Once a property has been developed it is possible to secure a buy to let mortgage on the property, should you wish to retain it.
What is needed for development finance?
The following are basic requirements for development finance:
- CV detailing your development experience
- Development finance appraisal of the site (including build costs and timescales, purchase price and expected GDV)
- Your assets and liabilities
- A link to the full planning for the site, drawings and plans
- GDV appraisal from one or more agents
How long does it take to get development finance?
Funding agreed in principle within 48 hours, with drawdown of funds typically within 8 weeks.
What is the process for getting development finance?
- Application made to lender who will sanction the loan at a credit committee meeting
- The valuations are instructed (QS report and valuation report)
- An offer of finance is made
- Solicitors work to draw down the funds
How is development finance repaid?
Development finance is repaid by selling the properties or through refinance. Refinance options include development exit finance, or buy to let finance.
How much development finance can I get?
The minimum loan is typically £500,000 with no upper limit, but the scheme needs to match a developer’s experience, while their net asset position needs to comfortably support a personal guarantee of approximately 20% of the loan.
Can you get 100% development finance?
Yes, 100% development finance is possible. Also known as joint venture finance, the loan is made up of senior debt and an equity piece. The senior debt attracts a coupon, and the JV funding partner will take a share of profits.
What is the meaning of development finance?
Finance to allow for the conversion, refurbishment or ground up build of a property.
Working with Fox Davidson for 100% JV funding
Lender relationships
Fox Davidson work with development finance lenders, individuals and family offices, all of which can provide 100% development funding.
We have built up relationships with these lenders and only approach those we know will want to lend to you and your particular development.
Lending Proposals
We will work with you to complete the necessary documents and prepare a comprehensive lending proposal.
Every application we put forward for funding will consist of four components:
- CV detailing your development experience
- Development finance appraisal of the site (including build costs and timescales, purchase price and expected GDV)
- Your assets and liabilities
- Planning details for the site
To get started please call us on 01179 897950, email enquiry@foxdavidson.co.uk, or alternatively, please complete the enquiry form below.