Did you Know?
What is often misunderstood is the fluid nature of the offers within the development finance marketplace.
It is often assumed that developer finance products are quite static i.e. once you know a lender’s product, you know and that’s it.
Credit policies are in a reasonably constant state of flux as a whole, responding to such factors as economic climate, new investment into the business or a changing Board members brings a change in risk appetite.
Through our comparison data, we’ve noticed in the last few years that approximately a quarter of the top 40 lenders change some part of their offering once every 3 months.
Below are 16 ways lenders can change their offering, for the better or for the worse:
- Minimum Lend
- Maximum Lend
- Developer Experience
- Risk appetite
- Credit History
- Sector appetite
- Max Loan to GDV %
- Max Loan to Total Project Cost %
- Minimum Developer Cash Stake
- Max Day 1 LTV %
- Interest Rate
- How the Rate is applied and calculated
- Arrangement Fees
- Exit Fees
- PG serviceability
The key takeaways from this are as follows:
The marketplace is far more fluid that many think
Developers need to regularly update themselves on the marketplace, at least once every 3 months
The downside is this realisation adds further to workload for developers searching for their ideal finance partners
Don’t have the time or want to spend the time staying up to date? Why not leverage our time and expertise and review our quarterly data instead?
Begin by downloading our Slash 50% off your Finance Costs Report, and we will provide quarterly updates
Chris Davidson is Managing Director of Discover & Invest Ltd, a specialist development finance brokerage and operator of the Discover Development Finance website.
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