July 23rd, 2013.
How to make life easier for your development lender
It’s well known that development lenders make things a little easier for property entrepreneurs and developers. Offering the finance that some commercial mortgage providers wouldn’t be able to and at more competitive rates than bridged finance investors, development lenders offer businesses the opportunity to build property – keeping business booming.
Yes, life would be hard without a friendly lender. But if you’re to enjoy the best interest rates and terms, it’s essential to keep your development finance lender sweet. Making life easier for them is a sure-fire way to make your life easier too – so here’s how to do it:
Keep your accounts in order
It hopefully goes without saying that one of the best ways to make your business attractive to investors is to have healthy accounts. Development lenders want to see that the entrepreneur they’re financing will be able to repay them in future years and the best way to make sure of this is with a few years’ worth of profit and loss accounts.
When you’re running a business, it’s an unfortunate fact that disaster may strike at any time. That’s why lenders will look favourably on those with all-encompassing insurance plans to ensure that they’re protected if there’s a delay in construction or an accidental, unexpected loss of revenue.
A development lender is only too aware of the restrictions inherent in planning and building homes, offices and workplaces, so before accessing their finance your scheme will need to be fully approved and ready to go.
Plan in stages
Often development financiers will minimise risk by promising funds to a developer, with the premise that the money is to be paid in different stages upon completion of various tasks. So create a timescale of your development and anticipate when you’ll need funds by – lenders will appreciate it if you’ve planned out your expenses in detail.
Work with a trusted broker
Imagine you’re looking to invest a six-figure sum in a commercial endeavour. Do you:
A) Lend your money to someone you’ve never heard of or
B) Invest your money in a venture that’s been ratified and vetted by someone that you trust
That’s one of the reasons commercial finance brokers are so popular – they’re a trusted contact for development lenders that reassures them that they’re making a sensible investment into your business. Having worked personally with a network of lenders, your broker will also know their likes and dislikes and therefore will be able to submit your mortgage commercial application in a way that suits them.