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100% Development Finance

100% development finance or 100% investment finance is a 100% finance facility tailored and provided to a sponsor that needs to raise almost the whole amount of finance to realise his project. There are different options to raise up to 100% finance. The first one is the common one with additional security; this option allows the sponsor to raise the funding needed by providing other assets (usually with the first charge on behalf of the lender) in addition to the existing project. Other options include a JV partnership, private equity investment, structuring debt as equity piece and restructure the whole deal with a combination of some types of finance.

Our experienced team analyses the project or the property deal and offers the sponsor the best options to realise the transaction.

Few examples:

How to achieve up to 100% development finance or100% investment finance?

Option 1

A property investor that is a partner in a building company has secured an investment opportunity, to buy an office building, convert it to flats plus two stories above and five units in the basement.

The investors’ capital is deployed in other projects; therefore, he would like to achieve up to 100% development finance or100% investment finance to realise the project.

The projects gross development value (GDV) with additional development is £ 38,700,000

Total (purchase and development) project costs are £ 29,500,000

The property investors’ finance contribution to the deal (0)

The finance partner (an investment house with different funds under management) £ 29,500,000

The property investor can secure with equity and debt structure the funds that he needs.

Option 2

A property group has a portfolio of real estate “buy to let” in London and the south east of England. The portfolio is profitable, however; the regular cash flow cannot support further new acquisitions and growth. The group has identified some new projects and would like to refinance the existing portfolio and achieve higher leverage on its portfolio. The groups Existing loan to value (LTV) is 64%.

The group approached different lenders, and the Maximum LTV that it had been offered was 70%

The owners contacted us, and we restructured for them the whole deal, and they got an offer from a real estate fund that we have a close working relationship for 85% loan to value (LTV).

They can use the surplus (21%) as a 100% equity for their developments.

Summary

Existing portfolio: 64% LTV

New facility restructured by property finance partners from a real estate fund 85% LTV.

Difference 21% – to use as 100% investment and development finance.

Option 3

A developer has secured a potential project for development. The private investor couldn’t invest the funds that he promised, so the developer needed to raise almost 100% of development finance. The developer could raise about 5% of costs.

The solution was a JV Partner that will provide the funding needed. (100% finance required)

The projects gross development value (GDV) £ 2,400,000

Total (purchase and development) project costs are £ 1,750,000

The JV partner (an investment firm) £ 1,660,000

The developers’ contribution to the deal (~5%) £ 90,000

To find out how we can help you to achieve up to 100% development finance or 100% investment finance, call today on 020 3393 9277