To get anywhere near the Government’s target of creating 1m new homes by 2020, it’s essential for small builders to build on small or unusual plots, that might otherwise be overlooked by larger developers.
At Seneca Bridging, based in Newton-Le-Willows, they know that smaller builders don’t have widespread access to development finance; many lenders simply won’t fund construction of 1 or 2 units. That’s not the case at Seneca. Whilst they can provide competitive rates on loans up to £2m for the larger developers, it’s the smaller builders who often work with them because of their commitment to helping them deliver a scheme and retain as much profit as possible.
As evidence of this, they recently launched the ‘Small Development Loan Service’ to offer a funding programme that specialises in this particular form of lending.
Small Development Loan Finance
Whilst drafting a strategy that would meet the needs of smaller property investors, they took their plans to a series of introducers and found that lenders often refuse to offer 100% of funding to smaller developers due to the perceived lack of reward (in terms of interest and fees) for the time and effort put in to underwriting a loan.
At Seneca Bridging, they have crafted a solution which encourages introducers to refer small housebuilding clients to them, and once they are on board, they ensure that introducers have minimal subsequent involvement, allowing them to concentrate on securing more clients.
Seneca meet with the developers and, drawing on our first-hand experience of construction analysis and property funding, they work to analyse ways to minimise project cost and to maximise sales.
A Cost Plan to Grow Margins
In many cases, smaller residential developers are accessing development finance for the first time, which means that they haven’t budgeted towards the use of professional services, such as a monitoring quantity surveyor or legal costs.
They like to work hand in hand with developers so, during the initial stages of a loan enquiry, they ensure that the cost plan allocates realistic budgets and risk forecasts as accurately as possible.
They use legal staff and surveyors who share our mutual understanding of delivering at pace, and with value, so as to maximise the property margins of developers.
At Seneca Bridging, they look at each case on its own merit, because no two opportunities are the same. Get in touch through the quick enquiry form, or by calling 01942 295 982.