How to Finance Commercial Property Development

  • Development Finance
  • Commercial Finance
buildings for commercial property development

Securing finance for commercial property development can be difficult. This is because it is often considered harder, more expensive and riskier than a residential development.

However, this doesn’t mean that securing funding is impossible. With the right advice from a financial broker, you can greatly increase your chances for success.

 

What is commercial property development finance?

This type of funding is designed to let developers or business owners build new commercial property.

At Finance 4 Business we do all of the hard work – our brokerage isn’t tied to a lender, so we will identify the lowest rates on our panel and find a lender that fits with your requirements.

 

How can I secure property development finance?

The most difficult part about investing in commercial property development is getting funding for your venture.

Lenders tend to favour residential developments, as they pose less of a risk of no return. This becomes even more difficult if you are a first-time property developer – you are often categorised as a risk, without the experience and proven successes behind you.

The key to success in securing commercial property development finance is to reduce the risk posed to the lender. That’s why, when applying for commercial development finance, it is important that you have a strong business plan. By speaking to a specialist broker, you can gain an in-depth understanding of how to achieve this.

 

What makes a strong business plan?

Reducing the construction risk makes for a great business plan.

The most important way of achieving this a sale or exit strategy. If you give the lender details about where pre-lets or pre-sales are possible, it can reassure them that you will be able to repay the loan.

 

How to support your business plan:

  • Strong, detailed designs from an architect
  • Full details about your background, including bulletproof financial appraisals
  • Realistic programmes for the work and details of the experienced teams you will be working with
  • Have the relevant paperwork, including valid planning permissions

At Finance 4 Business, our expert team can help you with devising a great business plan and securing the finance that you need to embark on your venture.

 

How does a Joint Venture (JV) work?

A joint venture is also a great option if you are a property developer as it can provide the capital needed to fund the development.

This option can enable you to acquire up to 100% of the funding for a development project and is usually arranged on a profit share basis. For more information, read our blog post about Joint Ventures.

 

Finance 4 Business

At Finance 4 Business, we offer expert advice on how to finance commercial property development, while outlining the options available to you.

Our dedicated commercial team have access to mainstream and specialist commercial mortgage lenders and are committed to finding the right lender for you and your development project.

Find out more by calling us on 0121 309 0444 or emailing enquiries@f4b.biz.