Finance for First Time Developers

Development Finance For First Time Developers

Making a start on the first development project in your portfolio is exciting, but not without its challenges – finding the right finance often being among the biggest. Many traditional lenders, like banks, might be cautious about offering development finance to new developers.

This is where specialist development finance loan providers like Pure Property Finance can help. We have extensive experience working with first time developers to help them find the right funding, navigate every step of the process, and negotiate terms that give their project the best chance at success.

Whether you’re refurbishing an existing site, or building your first residential or commercial property, we can connect you with a development finance lender suited to your individual needs.

What is First Time Developer Finance?

First time developer finance is a type of property development finance designed specifically for companies launching their first development project.

What sets this development finance apart from standard mortgages is the fact that it’s a short-term, project-based loan designed to help businesses tackle development costs associated with land purchase, buying building materials, and paying for construction work.

When considering development finance for first time developers, lenders put greater focus on having a clear plan and a solid exit strategy, as well as the backing of a professional team. We can work with you on the way you present your project, so you can improve your chances of securing a development finance loan.

Can Development Finance Cover Land Purchase Costs?

Yes, land acquisition can fall under development costs in property development finance terms. Many development finance lenders would offer to cover part of the land value, along with staged funding for the actual construction process.

Keep in mind that, as a first-time developer, you’d likely need to contribute a large sum from your own funds towards the land purchase as proof of commitment. However, we’ll support you in finding property development finance deals that minimise the upfront capital required as much as possible.

What Are the Advantages of Development Finance?

Development finance for first time developers has several benefits, including:

• Funding value – Development finance loans often let you borrow larger sums compared to traditional mortgages, so you can cover most of your development costs.
• Staged drawdowns – In many cases, development finance lenders will release funds in stages as your first development project progresses, allowing you to better manage your cash flow.
• Project flexibility – With first time developer finance, you’re not limited in the type of development project you can undertake; there are options suitable for anything from commercial property renovations to residential new builds.
• Short term – Traditionally, development finance for first time developers has terms ranging from six to 24 months, providing enough time to complete the development project and sell, or refinance.

Who is Eligible for a First Time Development Loan?

Eligibility criteria will vary between individual development finance lenders, but as a general rule, they’d like to see:

• Clear plan, complete with development costs
• Credible exit strategy (e.g. unit sales, refinancing)
• Sizeable personal financial contribution
• Reliable team of professionals, including architects, builders, and project managers

The latter is particularly key. While you don’t need experience to find funding for your first development project, having the backing of qualified professionals across every aspect of the project can make all the difference to your property development finance application.

What Types of Projects Does Development Finance for First Time Developers Cover?

When it comes to development projects, your options are wide-ranging. You can find property development finance for:

• Newly built residential homes
• Mixed-use developments
• Commercial property projects
• Conversions, renovations, and refurbishments

Exactly how much you can borrow, and for which projects, depends on the development finance lender, but we can help match you with the right provider for your needs.

How Long Does It Take to Get Development Finance Funds?

The time frame for securing development finance for first time developers depends on both the complexity of your application and the internal processes of your chosen lender. Typically, simpler development projects can get green light on funding within a few weeks, while more convoluted ones can span as long as six weeks.

The Pure Property team will be able to assist with streamlining the process when it comes to packaging up your application, so you can avoid any unnecessary delays.

Fund Your First Development Project, With Pure Property Finance

The task of finding the right first time developer finance lender for your needs can seem overwhelming, but we have your back!

Our experienced team will match you with providers who offer first time developer finance, and support you in negotiating the terms of your development finance loan for a healthy balance of risk and reward.

We will guide you through the different stages of the application process and the drawdown of funds for development costs, helping you put your best foot forward for a higher chance of approval.

Securing the right development finance for first time developers is often critical to the success of the project. Reach out to our specialist team today for tailored, professional, and transparent advice.