Complete More Projects and Achieve Better Margins: Seneca’s Small Development Loan Service
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, we 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 we can provide competitive rates on loans up to £2m for the larger developers, it’s the smaller builders who often work with us because of our commitment to helping them deliver a scheme and retain as much profit as possible.
As evidence of this, we recently launched our ‘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, we took our 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, we have crafted a solution which encourages introducers to refer small housebuilding clients to us, and once they are on board, we ensure that introducers have minimal subsequent involvement, allowing them to concentrate on securing more clients.
We meet the developers and, drawing on our first-hand experience of construction analysis and property funding, we 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.
We like to work hand in hand with developers so, during the initial stages of a loan enquiry, we ensure that the cost plan allocates realistic budgets and risk forecasts as accurately as possible.
We 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.
As members of NACFB (National Association of Commercial Finance Brokers), we originally published this article for the NACFB magazine – read the full feature here.
At Seneca Bridging, we look at each case on its own merit, because no two opportunities are the same. Get in touch through our quick enquiry form, or by calling 01942 295 982.