A flexible way for developers to finance house building projects across the UK. These tailor-made loans for property development can be arranged with competitive terms and we speak your language, no matter whether you are an experienced large developer company or relatively new SME developer to start and finish their projects.
We assess each application individually and price according to the strength of the development proposition and the borrower. We rely on our expertise over years of experience in this field to make an offer. Each loan application is assessed on its individual merits. Because every member of our lending team is well experienced in their role, we are able to work quickly and efficiently to meet development project deadlines.
Project Viability and Profit Potential
Once you understand and have calculated your project costs, you can then assess whether your development project is viable and profitable and worth progressing. You will need to demonstrate that you have a track record and experience in developing property.
Where you have little or no experience, your lack of experience should be supported by employing relevant professionals - architect, project manager, professional builder etc. A fixed price contract with your builder may be advisable /insisted upon. You will also need to show that you have the funds to support contribution needed, cash or land owned outright. We do not like lending on partially built projects.
Can be used for:
• Residential Development
• Commercial Development
• Mixed use Development
• Conversions and Refurbishments
• Planning gain
• Build to Let
• Sales Period Funding
Product details and criteria:
• Facilities range from £100k to £10m+
• We lend up to 80% of GDV
• Loans are secured by property/site
• Usually provide 100% of construction costs, professional fees and interest with a contribution to site purchase
• Interest rolled up or paid monthly
• Borrowing term from 12 to 60 months
• Competitive pricing and terms
• Borrowers should have appropriate expertise, or compensated for by a competent team
• Target Market: Experienced developers with a residential development that has reached practical completion, with the benefit of all consents and a warranty or Professional Consultants Certificate (PCC). The property/properties must be marketable and only recently offered for sale.
• Repayment: 100% of the net sales proceeds will be applied in reduction of the loan, until the LTV reaches 50% or less, after which the surplus sale proceeds can be retained by the borrower, provided the loan is still redeemed within the term.
• Arrangement Fee: 2%. The arrangement fee can be added to the loan; or it can be paid on completion.
• ERCs: Nil (subject to a minimum three month term).
• Default Loadings: If the loan is not repaid within the agreed term, a default charge of 0.25% pcm will be applied (3% p.a)• Title Insurance: Available on loans up to £2 million.
What do I need to make an application?
We will need to see:
• Purchase price or current value of property if owned
• A breakdown of your build/conversion/renovation costs
• Expected end value
• Level of contingency
• Costing with full breakdown
• Timescale for the project
• CV of experience - particular focus on property development
• Details of relevant professionals involved with your project, architect, project manager, builder etc
• Copy of planning permission
• Building regulations
• Any agreed ‘off-plan’ buyer(s)
• Details of any planning restriction where applicable
• Architectural drawings, structural engineering drawings, M&E drawings and soil and drainage surveys, depending on project type.
Stages to obtaining finance
Once you have identified a suitable building project with building permit or planning permission, or own a project with building permit or planning permission, you should contact DCANS Capital to discuss finance options.
2. Indicative Terms:
If the terms offered after your first enquiry, are attractive to you, one of our advisers will be able to fill out a brief development fact find and provide you with Indicative Terms from our backoffice. This is usually within 24 hours after enquiry.
3. Agreement in Principle:
This is when we communicate to borrower outlining our offer of finance and charges. It will be subject to a number of conditions for example; valuation, copy of the building permit or planning permission etc.
4. Site Visit:
We will come and meet you and your professional team on site to discuss your project.
A professional experienced surveyor will be sent to comment on aspects of your development. He will value the plot/property in its current condition and comment on likely build costs. He will also give an expected market value on completion and comment on the saleability of the finished project.
Before we issue a legal development finance offer, your application will be underwritten. This is confirmation of the exact terms of the loan and includes all costs involved ie. set up fees, interest rates etc.
In all cases, you will need your own solicitor to act on your behalf. It is important to use a lawyer that understands the processes involved in financing a development project. Choosing the wrong solicitor can cause unnecessary delays. The best lawyers are not always the cheapest and, if speed and efficiency are important, you may have to pay a little more - particularly to beat other builders competing for the project.
Where possible, employ a solicitor in your own local area. There will be occasions when talking to them direct or visiting their office at short notice will benefit you.
Completion is the term used to indicate that finance has been fully arranged and funds can start to be released. If you are buying the development, it is the last stage in the purchase of the site/building. The legal documentation is finalised and we would have sent any mortgage funds if applicable to your solicitor.
At this point, you will add your contribution towards the purchase which will then be sent to the seller's lawyer. As soon as the seller's solicitor receives the money, the site/property will be yours. This means that development can start.
Completion is the last step in releasing funds and/or purchase but marks the first stage in starting your project.
Any property used as security, which may include your home and/or business assets may be repossessed if you do not keep up repayments on your loan, or any other debts secured on it.