FUND YOUR DEVELOPMENT PROJECT QUICKLY
Property finance is traditionally a secured business loan that uses a residential property, commercial property, or property portfolio as collateral. As a result, you can borrow what you need, when you need it.
WHAT IS PROPERTY FINANCE?
Property finance can usually be broken down into:
- Development finance – funding the development of a project for example a new build or a renovation
- Commercial mortgage – Buying the property that you trade from – no development is involved
- Buy to let – Buying a property that you intend to rent out to a 3rd party
- Bridging – A short term form of finance (typically < 24 months) used to bridge an event where a loan can be repaid (sale of a property)
HOW DOES PROPERTY FINANCE WORK?
Each lender will vary but there are two common considerations for a lender when providing finance:
Funders will typically provide up to 75% of the value of the property – often the value in a forced sale as opposed to it marketable value.
Can the business afford to make the repayments on the loan with some form of stress test (ie if the business took a downturn). Due to the vast amount of lenders in this space and the different criteria and pricing of each, it is recommended that you liaise with a specific specialist that has experience in sourcing property funding to save you time and ensure you have the best deal available.
- Finance is more long term that other funding (upto 25yrs)
- Rates can be very low
- Rates can be fixed to give certainty of payment