Development Finance is a method of finance that helps Property Developers by providing them with an injection of cash to cover either the cost of purchasing the land or the costs of building the property. It’s mostly used to help property developers secure the funds they need to begin development.
However, there is much more to development finance than you may think – including the many benefits it can provide to property developers and those in the property industry. These benefits range from return on investment increasing to workload, both of which can ensure a property developer can make a successful and steady development.
Advantages Of Development Finance Include:
Project Size:
Development Finance can allow property developers to take on larger projects than they would’ve been able to when using their own funds.
As development finance, provides developers with the ability to secure the funds they need to finish or begin development, property developers have the ability to begin or continue their developments to a greater extent. With the ability to create higher quality projects and secure more high-market properties, this can allow for profits to potentially increase.
Furthermore, Development Finance provides the opportunity to undertake multiple projects at one time. This prevents developers from having to wait till a current project is sold and allows for developers to get their hands on new properties – stopping opportunities from being missed.
Increased Return On Investment:
Property Development finance can increase your ROI (return on investment), especially if you put less money into your project and finance the rest.
By putting less money into a project, you will reduce your profit, due to the cost of finance, however, it will lead to a much greater return on what you have initially invested, which can be very beneficial in the long term.
When appraising a project, the ROC (return on cost) is also an important measure to take into account.
Funding:
Development Finance gives Property Developers the ability to put less of their funds into a project. Most Property Developers invest around 20% – 40% of their own funds into acquiring a site or property and then borrow 65% – 80% of GDV (Gross Development Value) via development finance funding.
This prevents Property Developers from investing all their cash into one project and instead, use that cash for working capital or future opportunities that may arise
How Can Hawk Help You?
As experienced private lenders, we can finance your construction, conversion, or refurbishment projects with a flexible short or long-term loan. So, whatever the nature of your finance, we can work flexibly around your needs and timescales to help deliver your development project.
Helping you to achieve your property ambitions.
So, if you are a property developer looking to secure the funds for your next project, we’d love to hear from you.
Email: enquiries@hawkfinanceltd.co.uk
Phone: 01923 751 371