Debt Finance
We arrange debt finance for both residential and commercial property projects throughout
the UK. Terms that can be secured vary according to details of the specific transaction,
but a typical example facility for a development project can be summarised as follows:
Typical Example:
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Client type:
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Development company with experience and track record in property development
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Project type:
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Residential
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Value of completed project:
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£1m to £10m
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Term of facility:
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12 to 18 months
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Planning status:
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Detailed planning consent
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Facility provided:
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65% of site acquisition and associated costs
65% of development costs, professional fees, marketing, etc.
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Interest:
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Charged in a range of base + 2% to + 5%, rolled up and repaid from sales receipts
on completion
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Arrangement fee:
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1% of total facility, charged at time of drawdown
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Exit fee:
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1% of total GDV, paid at time of repayment
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Security:
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- First legal charge over property
- Debenture/floating charge over development company
- Assignment rights over fixed price JCT build contract
- Collateral warranties provided by key professionals
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Other costs:
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Borrower responsible for valuation and banks legal fees
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As with all types of finance facilities, the terms that can be procured vary upon
the risk profile assessed by the lender as well as the preferences of the borrower.
As an example, finer interest rates and reduced fees can normally be achieved where
the loan to value ratio is reduced and conversely are generally higher when the
key desire of the borrower is to maximise the facility provided.
We are pleased to advise on debt terms that are achievable on any specific project
based upon a summary of the project and a preliminary financial analysis.