Is funding available to help complete my development?
You may have already started your development project but require more funds to complete your build.
You are well into the property build, but unforeseen circumstances have spiralled costs. It could be delays in construction or rising materials costs, and you need extra finance to complete the build’s final stages. Your contingency is all but used up, but you have a shortfall to reach completion.
If the end value of the development looks like it will be worth more than the initial valuation and the property is wind and watertight, then the initial lender may be prepared to release extra funds.
However, more commonly, a short-term bridging loan can be used to pay off the development finance. This would release funds to allow you to complete the build. As with any Bridging Finance, an exit strategy will be required, whether the development sale or a commercial mortgage if planning on leasing out.
Example
You are developing an old building into ten flats, each worth £150k. The last few require completion, but the rest are in the selling process and may take some time.
We source 75% of the £1.5m value as short-term bridging, which is £1.125m. This allows you to pay off your development finance, complete the final few flats, and have funds to invest in your next property project.
The Bridging Loan exit would be the sale of the flats.
How can Sterling Commercial Finance Help?
At Sterling Commercial Finance, we’ve been helping businesses access funding for nearly twenty-five years. Contact the team today to see how we can help your business.
For more information on funding for development completion, contact the Sterling Team on 0115 9849800 or email property@sterlingcommercialfinance.co.uk
If you'd like to talk about this further
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