Structured finance for projects with GDV above £5m
Structured debt solutions for experienced property developers using a blend of senior debt, mezzanine and equity. Minimum GDV £5m.
Established property development companies commonly have issues with adequate cash flow to finance multiple, high-value projects simultaneously, and to be in a position to capitalise on multiple opportunities.
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.
How does 100% development finance work?
Lending is agreed on sites with full planning for residential use. Fox Davidson only work with experienced developers who have a site with a GDV above £5m. We will secure funding from several sources which will cover all costs including land, build and professional fees.
There will be a coupon payable on the debt and share of profits.
Key terms
- 100% loan-to-value development finance. Land, build costs, and most professional fees are completely funded.
- Loan size from £1 million with no upward limit
- Interest is rolled up and repaid on sale of the development
Criteria
- Experienced developers only
- Planning permission must be in place
- Multiple-unit schemes with an average unit sale price for the area
- Profit margin needs to come in around 25% to 30% pre-finance against GDV
- Personal guarantees are a requirement (build cost overrun or % of loan)
100% development finance options
There are several 100% development finance options:
- Additional security – 100% development funding can be achieved by utilising additional security. The additional security can include existing buy to let properties. Lenders can also utilise existing developments that have not yet sold. This is achieved through the lender placing a charge over the additional security.
- JV equity partner – A JV partner will provide complete funding in return for a share of profits from the sale of the development. Typically the JV funder will require a 40% to 50% share of profits.
It is possible to completely fund a scheme by working with the landowner of a site. You should discuss deferred payments of land or consider JV with the landowner. Fox Davidson finance developments that will be set up in this way leaving minimal cash equity in from the developer.
The process
- Application and supporting documents are presented to the lender. Lending is agreed in principle.
- An SPV limited company is set up
- Valuations are instructed to appraise the development
- Solicitors are instructed
- Funds are released
What paperwork is required for 100% development finance?
- CVs including previous development projects
- Development appraisal including cash flow
- Full details of the planning decision notice
- Assets and liability statement
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.
