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26/09/2013

Cenydd Rowlands on constructing the right deal for SME property developers

With transactional activity increasing and stable property prices, Welsh property developers can take full advantage of the confidence beginning to return to the market.

The Welsh construction sector received a welcome injection of capital in May this year with the launch of the £10m Wales Property Development Fund which backs small-scale, non-speculative commercial and residential property development schemes.

Smaller-scale schemes promise to bring fresh impetus to a sector hit by issues such as weak demand, falling property values and a lack of available finance in recent years.

Backing commercially viable schemes

Finance Wales can now provide small and medium-sized construction companies with short-term loans to back a range of schemes, which have secured planning permission, including:

  • New housing developments.
  • New office, industrial and warehouse developments.
  • Refurbishment projects.

We’ll need to understand how our loan will be repaid - what plans are in place to sell or let the property upon completion, for instance?  Profitable returns will enable Finance Wales to continue backing such projects over the next five years.

Short-term funding – maximum impact

With repayment terms up to 24 months, our property development loans of between £250,000 and £1m can fund projects with a maximum loan-to-value ratio of 65% based on the property’s predicted gross value.

Our loans can also be combined with other funds to get commercially viable schemes off the ground.  

The right funding profile

We can structure our loans with repayment profiles that take account of key development phases and completion dates.

What next?

Contact us if you’re advising a client with a construction scheme that needs backing.