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Lifetime Mortgages, Contractor Mortgages, Property Development Finance in Kent



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Can I Get Finance As A First-Time Developer?

Can I Get Finance As A First-Time Developer?

Embarking on a journey into property development can be super exciting, offering the promise of big rewards and the chance to bring your ideas to life. However, for many first-time developers, getting any finance to kickstart their project can be tough. Why are banks and finance companies so hesitant to help first time developers? And more importantly, how can you as a new developer, tackle these challenges and get your project off the ground?


Why Am I Struggling To Get Finance?

Banks and providers offering development finance are wary of lending money to new developers because, simply put, they worry about things going wrong and then not getting their money back. Property development is full of risks, like unexpected costs popping up or problems getting planning permission. Plus, if you've never done a project before, it's hard for them to trust that you'll be able to handle it.

Property development can be tricky. There is a lot that can go wrong, from mistakes during construction to not being able to sell the finished project. Lenders want to make sure they are not taking too big of a gamble. They will look at things like what kind of project you're doing and whether you have any previous experience.


How Can I Give Myself The Best Chance To Get Accepted?


There are ways for first-time developers to get the money they need. Working with experienced brokers can be a big help. They know the ins and outs of property development finance and can guide you through the process.

You might consider working with other experienced developers to help build the track record you need.

To convince lenders to give you a loan, you will need to put together a solid plan. This means more than just having a good idea—you will need to show that you have really thought things through. This means having detailed plans for how much everything will cost and how you will make money from the project.


Finding The Right Funding


There are different kinds of finance available for your property development, these include development finance, bridging loans or buy to let refurbishment mortgages. These are broken down below:


  • Development Finance: This type is most likely to require previous (relevant) experience but there are lenders who will consider working with new developers as long as the project is viable and there is a strong professional team contracted, i.e. main building contractor and project manager, both of which have previously successfully delivered projects of a similar scale. The terms for first-time or inexperienced developers are likely to be high, compared to those offered to experienced developers.

  • Bridging Loans: There are a lot of Bridging Lenders in the market and so competition is fierce. With the right security, there will often be more than one provider willing to fund a project, which means they can be pitched against each other to get the best terms available. Many Bridging Lenders will be able to offer solutions such as cross charging against other properties. Rates tend to be high, and you will need to have a strong exit strategy to show that you can pay the money back within the timeframe.

  • Refurbishment Buy to Let Mortgage: Similar to a Bridging Loan as the first part of the deal is a Bridging Loan with the exit being an option to switch the property to a standard Buy to Let.


So, Can I Get Finance As A First-Time Developer?


Getting financing as a first-time property developer might seem tough but there are lenders out there who are willing to work with first-time developers as long as they have a strong proposal, a good exit strategy and the figures stack up.

Consider speaking to an experienced broker to work through your options and come up with a plan with you.


At MRG Private Clients, we believe in providing our clients with personalised guidance and support when it comes to making important financial decisions. We are based in Medway, Kent but offer our specialist mortgage services nationwide. Learn more about our specialist mortgage services >

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