If there’s one way to generalize the process of financing used for the purpose of funding a new commercial or residential development, it would be called “development finance”. The term also covers things like bridge loans and all types of project developments. In most cases, the finance ranges between sixty to seventy percent of a development’s hard cost to construct, and it does not take into account the value if any work was completed. Since it’s typically funded by tranche drawdowns, the work can be optionally paid for by drawing funds out of your mortgage.
Now that you have a basic understanding of what development finance is, the question turns to when it would be used. There are a multitude of scenarios where it can be utilized that include but are not limited to converting a residential space into a commercial property or refurbishing an office. It’s flexible enough to cover a project as small as a single unit or a large multi-unit project. It’s particularly popular for Build-to-Let projects, Residential Income Properties, Owner Occupied business locations and it also comes in very handy when you need to cover sales period funding.
This update is provided to you by Park West Capital. We have over a decade of experience specializing in real estate financing and commercial lending opportunities. We have assisted numerous clients with growing their real estate portfolios and providing the funding resources. We firmly believe in accountability, excellence, integrity, entrepreneurship, and teamwork. Contact us at 888.808.9417 to learn more about how we can professionally assist you with your investing needs or fill out our hard money loan application and we’ll get in touch with you.