The criteria for development funding will depend on the project itself and the actual lender. In order to find the most suitable deal, we will assess each application on its individual merits before searching our extensive panel of lenders to find an appropriate solution.
What are the basic lending criteria for development finance?
Loan terms typically extend to 24 months.
A minimum loan size of £30,000 usually applies, although there is no ceiling limit on funding.
Interest rates are usually fixed at an annual rate of around 7%. This is rolled up and added to the total loan amount, so you will normally settle the interest at the end of the term as opposed to monthly.
The lender arrangement fee is between 1 and 2% of the loan size. In some instances, it may be possible to add this fee to the loan balance.
Exit fees are not always necessary, although if the LTV ratio is unusually high then an exit fee may be applicable.
Donkey Finance can secure funding up to 75% of the land purchase price and 100% of the actual build costs.
Funds will be released in order to match your cash flow requirements and the timing of drawdowns will be assessed by an appointed QS/monitoring surveyor.
Before development begins, the lender will visit and inspect the site and take a detailed look at your plans and costings in order to ensure your proposal is realistically profitable. The valuer will also assess and determine the GDV of the project (Gross Development Value) once it has been built.
