Small, Medium and Large Scale Development Finance: What’s the Difference?
Development finance has the potential to be a uniquely flexible product for a variety of purposes. All development finance loans are tailored to suit the individual requirements of the borrower and the project.
Contrary to popular belief, development finance is not available exclusively for the largest property constructions and renovations. Funding can also be provided for much smaller-scale projects, furthering the appeal of development finance to a much broader audience.
With this in mind, here is a brief overview of the three main categories of development finance and their applications:
Small-Scale Development Finance
The smallest development finance loans are those taken out to fund smaller renovation and property improvement projects; this would normally exclude structural alterations, instead focusing on things like decorating and upgrading interiors.
Also known as light refurbishment, this type of development finance is popular among developers and homeowners alike. For example, you may wish to conduct minor renovations on your home before putting it on the market in order to get the best possible price.
Medium-Scale Development Finance
This is the category of development finance that encompasses a wide range of structural renovations, property refurbishments and extensions. Medium-scale development finance is available in a wide variety of forms for numerous purposes, such as develop-to-let loans for landlords.
Developers may also conduct medium-scale alterations and improvements to properties in need of repair, in order to be sold on at a profit. This type of bridging finance product is a popular choice for improving and renovating low-quality properties picked up at auction, with the intention of flipping them for profit or renting them out to tenants.
Large-Scale Development Finance
This is available to cover the costs of the most extensive and ambitious projects. An example of which could be the purchase of a large commercial or residential building with the aim of converting it into multiple flats, or a semi-commercial building combining commercial units and homes.
This is also the type of development finance an investor may use to cover the costs of constructing a new property or series of properties from scratch. There are no upper-limits with regard to how much can be borrowed; qualifying for large-scale development finance usually means providing convincing evidence of an established track record in successful property development.
Independent Broker Support
Irrespective of which type of development finance best suits your needs, independent broker support is essential. Many of the UK’s leading development finance specialists offer their services exclusively via broker introductions.
Your broker will help you determine the most appropriate product for your requirements, before negotiating an unbeatable deal from a reputable lender. All 100% free of charge, with the freedom to back out at any time at no cost.
For more information on any of the above or to get your development finance application under way, call anytime for an obligation-free consultation.