Joint Venture development finance is a simple funding structure that benefits both the property developer and the lender/funder and allows borrowers to buy property and develop projects with nearly no money down.
This can even be used to buy land without planning permission, commonly known as making a planning gain.
A1 Commercial Finance can arrange funding to cover 100% of all acquisition and development costs on a profit share basis, helping developers to take advantage of an opportunity when all cash resources are tied up on other projects.
100% funded property developments
That’s right. Every single cost will be paid for by the JV funding partner apart from the valuation fee and legal costs. You can also include other fees in the deal apart from the build costs such as warranties, professional fees and Community Infrastructure Levy (CIL).
Joint Ventures usually only apply for property development finance, not just traditional bridging loans.
Having one Joint Venture (JV) funder covering all costs removes the need for any inter-creditor agreements, and keeps things simple.
Interest is charged at a competitive rate on the funds used, and the net profits are divided up. Profit share varies on a case by case basis but we are willing to discuss all options and many of the funders we deal with are exclusive to us.
A typical JV profit share is 60/40 in the borrowers favour however in some cases the profit will be split 50/50.
The developer can also draw a monthly project management fee to assist with his/ her cash-flow.
- Up to £200m
- Detailed planning must be granted
- Duration typically up to 24 months but longer terms can be considered
- England, Scotland & Wales
- Lower value houses preferred (individual house prices, not the total development cost)
How do you qualify for Joint Venture Development finance?
Naturally the developer must be experienced and have good knowledge of the market they operate in and we would want to see a CV detailing their background and recent property developments.
For the application to proceed, we also require:
- Full development & cashflow appraisal
- Copy of the planning permission for the development
- Architects plans and drawings
- Detailed breakdown of the build schedule including costs and timings
Joint Venture Development Finance is offered on a profit share basis, with an agreed split between the developer and the lender on completion of the project.
Usually, profits are usually shared on a 50/50 basis, although 60/40 in favour of the developer can be achieved for viable, strong applications.
As always, we split all the fees earned on the project 50/50 with our introducing partners. To find out more about introducing joint venture development finance enquiries to A1 Commercial Finance, visit our Introducer page.
About A1 Commercial Finance
A1 are experts in property development and Joint Venture development finance. With a choice of over 200 lenders and joint venture funding becoming more available, we are absolutely certain that we can find and fund the right loan, whatever the reason, for property developers, entrepreneurs and SME’s in the UK who are looking to grow their businesses.