For Developments Only
8. What additional information will I need to provide?
9. What minimum profit margin does the scheme have to show?
10. Must the scheme have planning consent?
11. Will lenders fund both new build and conversion/refurbishment projects?
12. Will the lender want a share of the profit?
13. How often can I draw down build costs?
14. Will the lender fund all the build costs?
1. How much can I borrow?
This will be determined by a number of factors including your experience, ability to repay and the type of security available.
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2. How much will it cost?
You will pay the lender an arrangement fee, usually around 1% of the amount borrowed. The lender will also charge you an interest rate that will be from 1% over base rate or LIBOR.
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3. How much do you charge?
CD Property Finance may charge you a fee of around 1% of the loan, but where a commission is paid by the lender to us this fee can be reduced or waived.
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4. What information will I need to provide?
We need to present a full proposal to the lender and will ask you for details of your experience, financial information and details of the property.
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5. How quickly will I get an in principle decision?
Once we have this information we will indicate to you the liklihood of successfully arranging the finance. The final decision rests with the lender.
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6. How long will it take to draw the loan down?
The lender will make its decision once it has all the facts and information from us. If the loan is approved you should allow between 6 to 8 weeks. This can be less in the case of a refinancing and more where the project is very complicated, especially if development is involved.
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7. What security does the bank need?
A first legal charge over the property and if you are borrowing in a company name they may need personal guarantees. Sometimes life cover is required.
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FOR DEVELOPMENTS ONLY
8. What additional information will I need to provide?
A development appraisal will be needed along with a copy of the planning consent, drawings for the scheme and comparable evidence for the resales. We may also ask for a development cash flow.
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9. What minimum profit margin does the scheme have to show?
As a general rule you should expect the development to produce a minimum profit on cost of over 20%.
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10. Must the scheme have planning consent?
Most banks will usually only lend where a planning consent is in place. An outline consent is acceptable if you are borrowing no more than 65% of the total costs of the scheme. Where you are borrowing more than this the lenders normally require a detailed planning consent.
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11. Will lenders fund both new build and conversion/refurbishment projects?
Yes
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12. Will the lender want a share of the profit?
If you are borrowing more than 65% of the costs they normally do. This is subject to negotiation.
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13. How often can I draw down build costs?
Most lenders allow you to draw them when needed, but usually once a month.
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14. Will the lender fund all the build costs?
Yes. You will be expected to provide all your contribution to the total costs when the land is purchased.
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