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Refinancing: All You Need to Know

Property development finance is a high-stakes business, with pressure to deliver completed, market-ready projects in time to repay development loans.

Get in touch with Hunter Finance to discover your property development finance options

At Hunter Finance, we have been financing construction and development projects for SMEs for over 10 years and know from experience that in the complex world of property, you need contingency plans in case unforeseen events and complications get in the way.

Delays to completion

While the schedule for building and completing a property development project is calculated carefully by the developer, working in association with lenders and Chartered Surveyors, there are sometimes unexpected delays.

This can have a significant impact on finances because the terms of a development loan require strict adherence to a timetable of building and repayment.

Securing financing with an existing loan

At the heart of refinancing decisions for lenders are two main issues:

  • Will refinancing allow the project to be completed such that a sale can be made?
  • Will the amount of money released through refinancing be adequately protected by the amount made from the sale?

Having an existing loan out for repayment does not disqualify a developer from securing refinancing for a project.

However, the terms of the existing loan and the ability of the developer to continue their repayment commitments are always taken into account by a lender, including by Hunter Finance.

Bridging loans

At Hunter Finance, we offer bridging loans of £100K to £1million, which can be rapidly arranged to ensure your project does not stall and risk serious financial consequences.

These loans are:

  • Issued towards the end of the build process of a property development project
  • Used to keep cash flow moving during the sale process
  • Avoid defaulting on existing loans while units are sold

The benefits of refinancing

Refinancing at the end of a property development project can have two distinct benefits for a developer:

  • Reduce or eliminate penalty fees that may be due if the project is delayed beyond the term of the loan. Refinancing essentially extends the borrowing term of the original loan and avoids the potential of default
  • Help a developer fund their next property development project. Refinancing allows a developer to begin planning, designing and acquiring the site for a future project while finishing an existing project

Our refinancing charges and interest rates

The rates of interest and the duration of a refinancing loan from Hunter Finance depend very much on the project in question and we are always prepared to look at specific circumstances before offering a rate of interest for refinance loan capital.

In each case, we would need to clear the existing charge on-site if there was one. Thus refinancing the site. Rates vary and are typically based on the loan value percentage, product and location.

However, the below would be a usual model for development refinancing.

  • 1-1.5% arrangement fee of the net loan, this is rolled into the loan and paid on redemption – be it, sale of the unit of refinancing.
  • 7% –  0.98% interest rate per month on drawn down funds only – we do not charge interest on funds that you have not received yet.
  • 1-1.5% exit fee on the gross loan. Again, this is paid at the end of the loan.

Call us today on 01825 749721 to talk through how refinancing or a bridging loan could help see your property development project through to completion.

Get in touch with Hunter Finance to discover your property development finance options

Start the loan process

If we can help we will say so, if we can’t we will be able to point you in the right direction or suggest alternative financial vehicles.


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