Development Finance
Maximising Growth through Development Finance
Development finance can be a game-changer for property developers, offering numerous advantages even if you already have the necessary capital. Utilising development finance can help you expand your project scope, maintain healthy cash flow, and maximise returns on investment. At Signature Search, we offer development finance solutions starting from just 0.83%, tailored to meet the unique needs of your project.
Advantages of Development Finance
1. Access to Larger Projects
Development finance provides the funds necessary to undertake larger projects than you could finance independently. This means you can embark on more ambitious developments and tap into bigger opportunities.
2. Maintaining Cash Flow
With development finance, you can keep your cash flow healthy until your project is sold. This liquidity allows you to manage expenses and invest in other projects without financial strain.
3. Continuous Development:
Development finance enables you to start new projects without waiting for the previous ones to sell. This ensures you do not miss out on any lucrative development opportunities.
4. Enhanced ROI:
By investing less personal capital and utilising development finance, you can achieve a higher return on investment (ROI). While financial expenses are deducted from earnings, the lower initial investment leads to greater profitability.
Types of Development Loans
Ground-Up Builds
New build projects typically require development finance loans. Once the project is watertight, developers may use development exit finance as a cost-effective solution.
Large-Scale Restorations and Conversions
For extensive restoration or conversion projects, refurbishment finance is generally suitable. However, for larger projects, development finance may be a better alternative.
Bridging Loans for Development
When banks cannot fund property purchases needing development, bridging loans offer a suitable alternative. These loans are ideal for properties requiring completion or development work.
Property Refurbishment
Refurbishment loans, a type of bridging finance, are used for various property improvements, including structural changes, extensions, and general refurbishments.
Repayment of Development Finance
1. Full Repayment
The total loan amount is repaid in full using the profits from the project once it is complete and sold.
2. Refinancing with Long-Term Loans:
If developers wish to retain the development for personal use or rental purposes, refinancing with a long-term loan is a common repayment method.
3. Development Exit Bridging Finance:
This short-term loan funds new projects before selling the current one. It also provides developers with breathing space to complete minor works and find buyers.
