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development Finance

What is Development Finance?

Property development finance is used to fund construction projects. It can be new build projects to create new residential houses and apartments, commercial units or mixed-use buildings (e.g. a retail unit on the ground floor of a building with apartments being developed above). Alternatively, it can be for comprehensive renovations or larger scale conversions (e.g. an office building being converted to residential apartments).

Property development finance is used to fund construction projects. It can be new build projects to create new residential houses and apartments, commercial units or mixed-use buildings (e.g. a retail unit on the ground floor of a building with apartments being developed above). Alternatively, it can be for comprehensive renovations or larger scale conversions (e.g. an office building being converted to residential apartments).

Whether you are a seasoned property developer who has undertaken numerous projects or you are working on your first project, Mantra Capital has a team of Development Finance experts perfectly placed to structure, negotiate and execute the deal for you. Representing you, we will handle everything on your behalf, removing the financing pressures and stresses attributed with every development project.

Types of Funding Available

There is now plenty of liquidity available in the development finance market and many solutions available. Funding is available from the High Street lenders, specialist development finance banks, private and institutional banks, private lenders and specialist funds – all of which have their own nuances and procedures. At Mantra Capital, we understand the benefit of each and every one of these funds and take time to understand their own credit/risk assessment criteria. Our in-house Bankers use their knowledge and experience to match our Entrepreneurs’ requirements and drivers to the best solution in the market. We will use our Banking knowledge to structure the deal in the right way, whether it be a single senior loan, a senior loan alongside a mezzanine facility, or a stretched loan offering a higher leverage. In many instances, we at Mantra Capital surpass our client’s expectations on leverage, rate, term, fees or all of the above.

Guidelines

Each development finance transaction is unique. There are many factors that impact the maximum loan amount and the most competitive rates. Due to our access across the whole market, and the level of liquidity in the sector, you can be assured that we will get the best deal for you.

  • Development Finance available to fund new build residential, commercial or mixed use buildings or to assist in heavy refurbishments or conversion projects.
  • Loans available from £150,000 with no upper limit
  • 1st and 2nd charge lending available
  • Lending of up to 90% of all total project costs can be arranged
  • 100% funding with additional security can be arranged
  • Build to retain or build to sell, both enquiries are welcome and commonly seen
  • No Geographic restrictions
  • High-end single units or large multi-unit projects can be financed

At Mantra Capital, we have the skill set, sector knowledge and contact base to ensure your spades are in the ground as quickly as possible. Our Lenders have personally lent millions of pounds during our days of working in the Banking sector so we know what the lenders will want to see from a lending proposal. We have worked with many different levels of developers who have benefitted from our hands-on approach and you can read about some of these successes in our testimonials section.

At Mantra Capital, we have the skill set, sector knowledge and contact base to ensure your spades are in the ground as quickly as possible. Our Lenders have personally lent millions of pounds during our days of working in the Banking sector so we know what the lenders will want to see from a lending proposal. We have worked with many different levels of developers who have benefitted from our hands-on approach and you can read about some of these successes in our testimonials section.

Rates & Fees

Driven by risk, leverage, experience and many other factors, there are many variables in development finance.

Low-risk, low-leveraged deals can be arranged at margins of c3% over Bank of England Base Rate. More stretched deals will carry margins of up to 10%-11% over Bank of England Base Rate.

  • Arrangement fees will be in the region of 1.5% - 2% including the Mantra Capital fee
  • Arrangement fees are paid in full upon the first drawdown of funds
  • You will have to bear the cost of valuation and legal due diligence for both you and the bank.
  • Depending on the size and in most cases, you will have to pay for a QS/MS as well as the Bank Monitoring fees.
  • You can expect to pay an exit fee. Our lending experts will ensure that the exit fee is against debt drawn rather than GDV – one of the many pitfalls of Development Finance and further encouraging the use of one of our specialist lenders.
  • Exit fees can be waived if the development finance is being refinanced by the existing lender. Mantra Capital can negotiate this on your behalf.
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