COMMERCIAL AND DEVELOPMENT FUNDING

Transcription

1 COMMERCIAL AND DEVELOPMENT FUNDING

2 CONTENTS

3 CONTENTS DEVELOPMENT LOANS 5 COMMERCIAL MORTGAGES 7 UNSECURED BUSINESS LOANS 9 BRIDGING LOANS 11 BUY TO LET MORTGAGES 13 ASSET/EQUIPMENT FINANCE 15 MEZZANINE FINANCE 17 ABOUT US 19 3

4 DEVELOPMENT LOANS

5 DEVELOPMENT LOANS Available for all types of projects whether for a single or multi-plot site Funding is available for all parts of the UK Loans available up to 60% of the Gross Development Value of the site which can be split for purchasing the site and completing the build works Terms from 6 months - 2 years Interest Rates from base % (as at July 2015) Options with regards to fee structures for both Arrangement and Exit Fees Funding for both Residential and Semi Commercial, houses, flats or apartments An example of a typical type of lender (others use a similar format) Multiple award winning lender Self-funded principal lender Decisions in minutes Funds within days Facilities from 100,000-20m (larger facilities considered) Fund up to 50% of GDV Fund 100% of build costs Refurbishments and conversions Case study Loan of 4,000,000 (60% of GDV) Interest Rate 4.2% Term - 24 months Arrangement Fee % Exit Fee % of funds 5

6 COMMERCIAL MORTGAGES

7 COMMERCIAL MORTAGES Available for all types of businesses Loan To Value up to 70% Bricks and Mortar Valuation (higher is possible with additional security) Available for both existing businesses and start ups Terms from years (30 years possible) Interest Rates from 2.84% over Bank Base Rate Business Plan and Cash Flow Forecasts to be provided Figures to confirm serviceability of the Lenders debt Case study Freehold Restaurant Loan of 325,000 Interest Rate 2.84% Term - 10 years Arrangement Fee Valuation and Security Fees 7

8 UNSECURED BUSINESS LOANS

9 UNSECURED BUSINESS LOANS Funding is available for any type of business whether it be a Sole Trader, Partnership or Limited Company For loans above 25,000 the business must have been trading for more than 2 years and have a turnover of more than 100,000 per year For loans below 25,000 loans are assessed on a credit scoring basis with our panel of Lenders and are available for both start up and existing businesses Rates can vary from 7% - 12% with usual repayment terms of 5 years Typical type of lender Decisions within 24 hours from submitting the loan application Funds within 10 days Available for any purpose Facilities up to 250,000 No business plan required Case study Engineering Business Limited Company Loan of 40,000 Interest Rate 8.57% Term - 3 years 9

10 BRIDGING LOANS

11 BRIDGING LOANS A bridging loan is a type of loan that is used to cover shortfalls between buying one property and selling another, or to cover a business whilst conventional funding is arranged A bridging loan can be used for a house purchase, new business equipment or an unexpected bill The most common uses for bridging loans are as follows: Purchasing a property whilst waiting for the current property to sell/complete Buy To Let opportunities: Land purchases Purchasing property at auction Developing and refurbishing a property Business finance opportunities Payment of Tax and VAT Loans available up to 70% of the Market Value of the property (higher may be considered) Terms from 6 months - 2 years Interest Rates from 1% - 2% Options with regards to fee structures for both Arrangement and Exit Fees Funding for both Residential and Semi Commercial, houses, flats or apartments Case study Care Home Freehold Purchase (completion 28 days) Loan of 600,000 (80% of Freehold Value) Interest Rate 1.2%/per month Term - 12 months Arrangement Fee - 2% Exit Fee - 1.5% 11

12 BUY TO LET MORTGAGES

13 BUY TO LET MORTGAGES Available for Residential, Commercial and HMO s (House of Multi Occupancy) Residential: Loans up to 70% Terms up to 25 years Rates from 3.75% (subject to status) Rental cover from 100% - 175% Commercial: Loans up to 60% Terms up to 20 years Rates from 9.99% Rental cover from 100% - 175% HMO s: Loans up to 70% Initial 3-year deals Interest Rates from 9.99% Rental cover from 100% - 115% Case study Residential Buy To Let Loan of 500,000 Loan To Value 50% Interest Rate 3.75% Term - 25 years Arrangement Fee - 1.5% Rental Cover - 125% 13

14 ASSET/EQUIPMENT FINANCE

15 ASSET/EQUIPMENT FINANCE Asset/Equipment Finance available to existing businesses, for new purchases on equipment or vehicles Leases are available for up to 5 years with the monthly rental payments off set against tax Sale and Leaseback can also be made available for owned business assets usually over a 3-year period Decisions from Lenders usually within 48 hours unless the Asset is difficult to value and then an independent valuation will be taken Typical type of lender s requirements: Terms up to 5 years New start ups considered Leases from 700 up to 20,000 Response within 24 hours Homeowners No bank statements or initial rental cheques required Lending throughout the UK Most sectors considered Higher funding available with additional security Case study Funding for Body Spray Shop Assets Existing Business Assets Loan of 13,000 Monthly Repayments VAT Term - 36 months 15

16 MEZZANINE FUNDING

17 MEZZANINE FUNDING Mezzanine development finance (or mezz finance ) is provided to bridge the gap between senior debt funding and the developer s equity investment into a property development transaction Mezzanine finance is largely required to be invested into the project on day 1 to contribute to the purchase or the re-finance of debt, therefore it is extremely important to minimise the rate as this will likely be the greatest relative contributor to the overall cost of finance Typical type of applicant Requiring a level of funding achievable through a combination of senior debt and mezzanine facilities Case study Our clients secured a site in Torquay for a development of 18 houses within a development site that included 33 houses and apartments The bank was due to foreclose on the vendor, and our clients had to respond quickly, in order for the vendors to release funds to continue with the refurbishment of the Main building into apartments We have agreed a purchase price of 1m for the site, payable in two tranches, with 550k being payable at the front end, with a deferred payment of 450k, however with the bank releasing full title on day 1 Deal Structure: Client funds : 550k Senior debt facility (Land & Development) 3.7m Mezzanine facility 450k Monthly Interest 2.0% (rolled up to completion of the project) Project GDV 6.2m 17

18 FLEXIBLE LENDING FOR BUSINESS

19 ABOUT US Commercial Development Funding UK are specialists in arranging asset and non - asset backed finance across a range of sectors, with a focus in the property market. E: [email protected] T: W: Orchard Lea Drift Road Winkfield Windsor Berkshire SL4 4RU 19

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