Development Finance
Fiducia Commercial Solutions provide a range of development finance options for clients.
Development finance options refer to the various types of financing available for property development projects.
These options are designed to provide funding for the acquisition of land or existing properties, as well as the construction or renovation costs associated with development projects.
Finance terms available vary according to the initial value of the property / land, the costs and fees of the development work, the projected value of the completed development and your previous experience of development.
Variants include:
- Light Refurbishment – Cosmetic refurbishment with no structural changes.
- Heavy Refurbishment – Contains cosmetic work, but usually renovation work including structural changes or changes to the footprint of the property.
- Ground Up Development – Commonly starts from vacant land, can include demolition and rebuild projects.
Development Finance Options
Fiducia Commercial Solutions has access to a variety of development finance options and will work with clients to fully assess and understand their needs.
Development loans are specifically designed for property developers and used to finance the entire development project from start to finish.
Development loans typically have flexible repayment terms and are tailored to the specific needs of the project.
These loans are often provided by specialist lenders or development finance institutions.
Another option is mezzanine finance. This sits between the senior debt and equity in a capital structure and provides additional funding for development projects.
Mezzanine finance is typically used to bridge the gap between the amount of senior debt available and the total project cost.
Equity Finance
It is often structured as a loan with an equity component, allowing the lender to participate in the project’s profits.
Equity finance is another development finance option.
This involves raising capital by selling shares or ownership stakes in the development project.
Equity finance can be obtained from individual investors, private equity firms, or real estate investment trusts (REITs).
This option allows developers to access funds without taking on additional debt, but it also means sharing ownership and potential profits with investors.
There are also government-backed development finance programs available in many countries.
Tax Incentives
These programs provide financial support and incentives to encourage property development and regeneration in specific areas.
They may offer grants, loans, or tax incentives to developers who meet certain criteria, such as building affordable housing or revitalising underdeveloped areas.
The Fiducia Commercial Solutions team are vastly experienced at working with developers to truly understand your requirements.
They will work with clients to carefully evaluate their financing needs, project feasibility, and the specific requirements of their development projects and help to navigate the complex development finance landscape.
