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Senior Debt
“Senior” debt is a first charge development finance loan, that would typically make up the majority of the funds required to complete a property development project. Such facilities are to be used specifically for property development, and are structured in such a way to best suit the proposed scheme.
What is Senior Debt?
Senior Debt development finance is the conventional type of property development loan, where the lender takes a first charge over the site/ property being developer, and can fund up to 65% of the Gross Development Value, or 80% of project costs, including an interest provision (so interest does not have to be paid monthly). Senior Debt is the cheapest form of development finance, particularly where the borrower can inject a good amount of cash on day one, towards the land/ property purchase (or refinance).
Whilst a good level of direct development experience can give access to a wider range of lenders, there are lenders who can consider first time developers.
Residential developments are preferred by most lenders, but there are options for mixed use, commercial, student accommodation, leisure, care home and industrial developments, countrywide. Currently there is a massive range of first charge development finance facilities, with options to suit a vast range of circumstances.
What is Senior Debt used for?
High Street Banks, challenger Banks, specialist lenders and family offices all provide senior debt. Such loans can vary rather dramatically from lender to lender, and the cost of the loan can be determined by the Loan to Cost or Loan to Value, and the experience of the applicant developer, as well as the location, size and type of development.
With such a wide range of development finance lenders in the funding marketplace, each with their own parameters and criteria, utilise our services and spend your own time on the things which you do best! With no up-front costs, you have nothing to lose.
What are the Key Features of Senior Debt?
Typically up to 65% of GDV, or 80% of project costs
Arrangement fees from 1%
Interest rates from 4% per annum
Options with no Exit Fees
Up to 24 months, or longer by agreement
Minimum loan £50k, with no maximum loan size
Options with no Personal Guarantees.
Countrywide coverage
Valuation and Monitoring Surveyor (“MS) fees case by case.
What are the Senior Debt lending criteria?
First charge lending only
Greater development experience gives access to cheaper rates
Multi-unit schemes preferred, but single units can be considered.
Executive residences can be considered.
Adverse credit can be considered
Detailed planning consent must be granted
Residential, mixed use, commercial, student, care home, industrial etc all considered.
UK countrywide coverage
What information will I need to provide?
Applicant company name & number.
Directors & significant shareholders CV’s or Biographies.
Full site/ property address.
Copy of the planning consent.
Financial Appraisal (can exclude finance costs) and Cash-Flow.
Detailed build costs.
Schedule of proposed Accommodation.
Details of the professional team (contractor, architect, structural engineer, CDM coordinator etc).
Procurement Method (For example, Design & Build or Construction Management?).
Any comparable sales information (or agent’s opinions) to support the proposed GDV.
Criteria Overview
- Cheapest rates guaranteed
- Up to 36 months
- Loans from £100K to 100 Million
- Any location
- Options with no exit fees
- Residential commercial mixed use
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