Six Essential Tips for Choosing Development Finance
03 November, 2021
Shopping around for a cost-effective development finance deal can be a daunting prospect, particularly for newcomers to development finance, the landscape can be complex and convoluted at the best of times.
While all development finance deals are unique, the steps involved in getting the best possible deal are always the same. Before taking your business to your preferred development finance specialist, be sure to bear the following tips and guidelines in mind:
1. Target experienced development finance specialists
It is always better to do business with an established and experienced development finance specialist, not simply a major bank or lender who offers rudimentary development finance as something of a side-line; the more extensive your requirements, the greater the importance of working with a reputable development finance specialist.
2. Compare the market in its entirety
This is something that can only be done with the help and support of an experienced Whole of Market broker. Remember that many of the UK's leading development finance specialists offer their services exclusively via broker introductions. Even if you conduct a dozen searches via the web's leading comparison sites, you may not get an accurate picture of the most competitive deals available.
3. Demonstrate your experience
Ensure you have presented your case as convincingly as possible. In particular, it is important to remember that lenders like experience. In terms of both eligibility and preferential interest rates, proof of knowledge and experience go a long way. Even if this is your first time applying for development finance, providing evidence of an established track record in the field is essential.
4. Focus on your exit strategy
Development finance specialists expect to see clear evidence of a concrete exit strategy; more specifically, an exit strategy where every possible eventuality has been taken into account. Wild projections and unrealistic assumptions will get you nowhere. To qualify for a good deal, you need to make it clear to the lender that irrespective of what happens, you can guarantee they will get 100% of their money back.
5. Consider the alternative options available
Depending on your requirements and the nature of your project, alternative approaches to funding may be more appropriate. For example, a bridging loan could be a cost-effective option if the funds are needed as quickly as possible, and you can repay the loan in full within a matter of months. Carefully assess your requirements, priorities and preferences, in order to help you make sense of the alternative options available.
6. Choose the right broker
This is the most important step in the process when choosing a development finance product. Your broker will help you determine your requirements, establish your budget and choose the most appropriate product accordingly. They will also pair your requirements with an appropriate lender, negotiate an unbeatable deal on your behalf and help you present the strongest possible case. All of which is provided 100% free of charge to the client, with no obligation to go ahead until the loan agreement has been signed.
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