Within the commercial property market in the UK, most loans are non-recourse. Non-recourse means a loan that is secured by collateral such as other assets or property.
For non-recourse lending, it is quite common to put the property or asset in what is called a special purpose vehicle (SPV).
This will provide a ‘clean company over which the borrower can place the legal charge that forms the loan security.
Here at Hunter Finance, we strive to make property development finance not only simple but quick and efficient.
We can approve loans within 48 hours, and because we lend our own money, we do not charge broker or upfront fees.
Call us today on 01825 749 721.
Recourse loans allow independent lenders to tap into the borrower’s other assets if there is an outstanding balance left to pay on a loan.
However, lenders of non-recourse loans are forbidden from going after a borrower’s assets, even if there is an outstanding amount left to pay. More on an exit strategy.
As well as initial loan agreements or restrictions which are applied at the beginning of the loan, most property finance lenders will ask for the provision of ongoing loan covenants which reflect the property’s value and the income cover.
Read more on how to get the best deal on development finance.
An example of a loan covenant is the loan to value (LTV), which ensures that the value of the property does not drop to an unacceptable level compared to the loan amount.
Here’s how to get the best property development finance deal.
With Hunter Finance, the security of the loan is held in the land. We require a 1st legal charge (just like a mortgage company will place on a house) over any site we lend on.
If the site is being developed by a company or group of directors, this will change slightly.
Our property development finance is non-recourse, as we believe in forming trust and rapport with our customers and helping them as much as we can to get their project underway.
Most lenders and major banks will treat credit checks as a major part of the application process.
For them, having a good credit history will give them more confidence that you will repay the loan.
However, here at Hunter Finance, we don’t consider credit checks to be a major factor in our lending criteria.
We are happy to look at all applications, even those with a poor credit history.
We are more concerned with the development site and the project itself.
Our lending process is quick and simple, with no middlemen or hidden fees.
Our lending process includes 5 simple steps that can help you get started as soon as possible, and with maximum security:
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.