Development Finance is a specialised field in commercial lending with many differences from other types of commercial lending. We are proud to be Australia’s Business loans specialist especially when it comes to Development Finance.
Why would you want to borrow money for development?
There are many benefits to borrowing money for development as there are also some points to be aware of:
- It is very capital intensive to fund a full development from capital reserves and commonly the funding from a commercial lender is required to facilitate the construction.
- Most commercial lenders have specialised divisions that deal specifically with development finance applications so you can ensure you are getting the correct terms/support and structure.
- With the return of the property market growth, lenders appetite towards development finance has greatly improved.
- Costs of finance are generally very good with the current low interest rate environment which improves the rate of return for the project.
Some things to keep in mind:
- Experience in successfully completing similar projects goes a long way in your application for finance.
- Lenders will require comprehensive documentation to assess the particular project you are looking to finance including: developer profile/history, feasibility study, development and building approvals, financial position of the developer, sufficient capital contributed to the deal and appropriate returns, builder profile and project summaries.
- Developments can provide great returns on investment however also carry increased risks that can see potential profits erode quickly.
- Given the specialised nature of development finance you should ensure you speak to an experienced commercial broker that has specific development finance experience such as Edgeview Direct to ensure your project gets out of the ground.