Getting Finance for Property Development
Understanding what lenders providing finance for property development look for when reviewing applications from borrowers, can help you improve your own application, and thus increase your chances of securing the financing you require. A substantial security provided is tempting for any lender...
The value of the development project upon its completion
Selling dwellings where the value exceeds the median price for dwellings of similar type in your area usually reduces your chances of security funding – lenders will regard the dwellings as difficult to sell, and thus not a great security for their money.
Increase your chances of getting finance for property development by choosing residential zoned land in cities, or close to cities. Security funding for rural properties is tougher to get these days, unless the project is really special. Moreover, if the area where the dwellings are built has a history of financial development, your chances of securing funding will further increase.The financial strength of the borrower
Providing proof of your incoming cash flows helps lenders realise how much you’re worth. If you’re experiencing financial difficulties, it might be better to delay your funding application for a few months to avoid the disappointment of a possible rejection.
The size of the apartments if the development is an apartment complex
Small apartments are not generally considered attractive by lenders, who will not easily provide you with funding for their construction.
The professionalism of the application
Good applications for funding, which besides the design concept include net timelines, costing, CV of key managers and consultants, and projected sales, are extremely convincing. Lenders are willing to provide finance for property development this year, but they must ensure they are lending to developers who know what they are doing.