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Lloyds Property Development Finance Loans from Lloyds Bank, if you are looking to get a Lloyds development loan you will usually have to be an existing client or have a financial history with them most of the top four high street banks have this as a criteria for who they would offer to fund too, they would also want to know what your past experience is in property development, borrowers with little experience would not be considered for finance and first time developers would find it near on impossible to get a loan, the definition of an experienced property developer would be one who at the very least has successfully completed at least four previous schemes, furthermore they would have to demonstrate that these were completed on time within budget and all of the properties had sold at a profit, the minimum profit expectation would be 20-25 %, like most high street banks whilst they do offer to fund for property development they are very cautious as to who they will lend to, property development finance is seen as a risky loan by all high street banks, as we saw after the financial crash properties prices in most of the country plumbeted and left may lenders and banks exposed with loans outstanding against sites and properties that would be difficult to cover.
After the crash high street banks virtually pulled out of the development finance market, even for existing clients the conditions were to riskey to offer loans, this then left many property developers short of the funding they needed to build houses, the developers still had confidence but the banks just didn't want to lend, this then created a gap in the market in which many specialist lenders entered offering products for developers that had previously been unavailable, to date over 80 of these specialist landers are no active and lending to property developers not just experienced but they will also lend to developers with little or no previous experience, allowing them to start developing, the main thing they are looking for is a sound business acumen and borrowers who are approaching the project in a professional manner, their cost all stack up and the scheme shows a healthy profit margin, they will be employing a professional builder and want to sell the properties after construction.
Lloyds Property Development Finance Other Costs to include
High Street banks like Lloyds Development Finance offer competitive interest rates on their development finance from as little as 4% p.a however there are other costs involved that can a significant difference, these would include the banks arrangement fees you will need to factor in between 1-2% for this, this amount is charged on the amount of the loan that will be advanced to you, also high street banks would want you to pay them an exit fee when you redeem the loan this can be as high as 2% and this is not on the loan amount but on the total value of the properties when they have been sold, so it is not all about the interest rate that is charged, with specialist lenders no such exit fee is charged just the arrangement fee, so when considering what the total costs of your finance is going to be all of these arrangement and exit fees need to be taken into account.
Lloyds Development Finance will also include the following.
You will also have factor in the cost of a surveyor for a Lloyds Development Loans who will be instructed to evaluate the costs and viability of the project including the valuation of the land and what the end values will be when they are sold, In addition to this you will need to pay not only your legal fees but also the banks solicitors legal fees this amount will be agreed before you enter into any loan agreement.
Lloyds Development Loans
Target Mortgages have been arranged property development finance for over 20 years and the directors are also experienced property developers this puts us in a unique position in that we can immediately tell you what funding would be available to you and also help secure you the best deals in the market.
Getting a Lloyds Development Loan.
We are here to help you every step of the way and understand the industry inside out, so get in touch today, you can give us a call anytime or contact us via chat or our contact form.
Property Development Finance is not Authorised or FCA regulated.