A new corporate finance initiative will ensure small builders can access the finance they need to “grow and deliver more homes at pace”, it has been announced.
Led by Homes England in collaboration with financier Invest & Fund, the seven-year scheme will boost the availability of cash to small and medium-sized residential developers.
Under the scheme, £25 million will be put into a revolving fund to allow Invest & Fund to support developers with construction loans of between £400,000 and £2.5 million.
Applications for loans – which must fund at least two homes at up to 80 per cent loan-to-cost (LTC) -are being accepted from yesterday, Wednesday 09 September.
Commenting on the launch of the initiative, Gordon More, Chief Investment Officer at Homes England, said: “The deal demonstrates our ability to Make Homes Happen in different ways in support of our mission. We are particularly pleased to be working with a specialist finance provider, recognising the crucial role that the Non-Bank lending market continues to play in supporting smaller builders in these challenging times.”
David Turner, Chief Executive at Invest & Fund, added: “Our approach of employing a best in class credit underwriting model, backed by a strong focus on operational excellence and our culture of good governance has been recognised in this partnership and we are focused on lending to creditworthy borrowers via this venture.”
- Loan to Gross Development Value (LTGDV) 65 per cent (Up to 80 per cent Loan to Cost)
- Interest Rate 6.65 per cent + Bank of England Base Rate
- Arrangement Fees of 2 per cent and no Exit Fees
- Loan size £400,00 to £2.5 million
- Up 24 Months Term
- Maximum Unit Gross Development Value (GDV) £800,000
- For leasehold houses or flats, rent to be peppercorn
- Developers to have experience of similar projects
For help accessing corporate finance, including applying for a loan under the new Homes England scheme, please get in touch with our expert team today.