Loans To Buy Land

Hertfordshire Business Funding specialise in providing a combination of debt and equity to companies. Here we will discuss the potential options for loans to buy land.

There are a number of different financing options available for property developers who are seeking to buy land, these include:

Bridging Loans – these are short term loans which can be used to buy land and other buildings. There are an increasing number of lenders in this marketplace and loan to values’ are becoming increasingly competitive. Therefore you may be able to achieve up to 75/80% loan to value. The benefits of bridging lending is that they are normally pretty quick, and can often get facilities completed within 7 days. The negatives are that bridging facilities can be expensive, with rates starting at circa 0.4% per month, up to 2% per month. Bridging loans start at 3 months duration and it is possible to get an extended term to around 24 months. The bridging lender will want a clearly identified exit strategy to ensure that they are going to get repaid. Bridging loans are available from £250k .

Commercial Mortgages – are longer term facilities which are available from both high street and challenger banks. These will typically have a longer term facility with a minimum of 12 months, up to 30 years. The application and approval process for a commercial mortgage facility will normally take 2 weeks plus, more realistically 1 month to get implemented. Rates for commercial mortgages are normally on a variable basis and it is possible to achieve 3.5% above LIBOR (London Interbank Offered Rate). Commercial mortgages will typically have lower LTV’s than bridging loans, and will normally offer up to 65% LTV.

Development Finance – In some instances it is possible to get one lender to provide a multiple facility loan. This will typically start off as a bridging loan, once planning consent has been achieved then the lender may in some instances then provide a development finance facility on top, to enable a developer to build out a scheme. Each element of the loan will be underwritten by the lender on it’s merits, and will have variable interest rates.

If you are interested in securing a loan to buy land, Hertfordshire Business Funding would be delighted to assist. We work with a number of the UK’s leading property funding houses, development finance and bridging finance facilities. Contact us today for a free no obligation initial consultation.

from Hertfordshire Business Funding https://www.hertfordshirebusinessfunding.com/loans-to-buy-land/
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