Whether you are planning to buy a residential or commercial property, or carry part-built renovation, conversion or new build, then property development finance is what you should consider.
What exactly is development finance?
Development finance, also known as property, building, bridging and construction finance, refers to the short-term interest-bearing loans for a specific period, which is usually of three to four years. The main aim of the loan is to facilitate capital required during development of a property – land acquisition, professional fees, building works, marketing, finance itself or any contingencies involved in a development of a commercial or residential property.
What are the sources of acquiring such finance?
A lender can obtain property development mainly from two sources including commercial banks and alternative lenders. Acquiring property development from commercial banks requires a lot of paper work that sometimes become daunting to fulfill. In such cases, alternative lenders come into play.
Through alternative sources of finance like Challis Capital, finance can be obtained despite of bad credit history, and lack of some papers. You can contact the company to get to know the process better.
What are the terms and conditions involved in the process?
The main concern of any party lending money for the purpose of property development is to determine the repay ability of the borrower under the agreed terms and conditions. Thus, anyone who is looking for property development finance needs to produce a funding prospectus setting out the project’s financial requirements.
Then, the borrower needs to clarify the purpose of the property, whether it would be occupied by the owner, sold on or retrained as an investment. The value of the property at all stages of development is important as it becomes the security of the loan and could be repossessed by the lender if the borrower is declared defaulter.
These all terms and conditions are laid down in a lending agreement.