Development Funding: 3 Ways You Can Get It
When planning a big development, such as the construction of a house, commercial building or new office centre, planning the development funding is an essential part of the process.
The funding of the development will ensure that the project can get started, that the architect, builders, and subcontractors get paid and that the project can come to completion.
There are several options to consider when planning your development funding. In this article we are introducing a few of them.
Mortgage Broker
A mortgage broker cannot only help with home loans they can also help with quick loans for development and construction funding. They typically have access to a number of lenders and can find the best deal for you. However, it is important to consider that a mortgage broker probably receives commissions from the lender and therefore may not recommend the option that is best for you, but rather the options that make them the most money.
Banks
Banks can typically arrange a construction and finance loan for a developer or builder when they have the right securities. This means they need to show the bank that they will be able to pay back the funding and have securities in place in case something goes wrong. Banks can only recommend their own solutions and do not have access to a wide pool of options for development funding. In addition, the development funding available from banks is often slow and may fall through at the last minute.
Boutique Lender
A boutique lender is a great option to get development funding. They are normally flexible enough to tailor a solution to your exact needs and they have very fast turnaround times to get your project started. Because you deal with the lender directly, rather than through a broker you will have direct access to ask any questions and you’ll cut out additional administration. Finding a good boutique lender can be a challenge, so it is wise to ask your colleagues and mentors to recommend someone. It also pays off to choose a boutique lender who has extensive experience in the field of development funding and who knows your area well.
In summary, when choosing the best option for your development funding, you need to consider the circumstance of the project you’re working on. How quickly do you need the funds? How long will you need them for? Have you adequately provided for potential delays in the project? Can you choose from previous funding providers or can you receive credible recommendations?
When you answer these questions, you are likely to find the best development funding for your circumstances.