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The Impact COVID-19 Has Had On Development Finance

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The UK economy has been hit hard in 2020 and 2021 as it feels the impact of COVID-19. The Coronavirus pandemic and a turbulent marketplace have hit the housing market hard, and the availability of property development finance has contracted in response.

When residential and commercial building valuations are less predictable, and exit strategies are less certain, traditional banks become cautious and wary of lending or demand more equity to mitigate lending risks.

Consumer and business spending is below pre-coronavirus levels and could remain so for years to come if access to property development finance is restricted. However, if development finance is accessible and sensibly qualified, the recovery scenario looks much more positive, with property development loans aiding reform and accelerating post-pandemic recovery.

One stimulus that has been introduced to help tackle this difficult time is the government-backed Coronavirus Business Interruption Loan Scheme (CBILS). CBILS offers finance of up to £5m over two years, for SMEs with an annual turnover of up to £45m.

The business loan is for businesses losing revenue or experiencing cash flow disruption as a result of the pandemic. BLG is a scheme partner, bolstering funding availability alongside our usual property-secured loans for businesses that meet the scheme’s criteria.

Residential Development Finance

With a viable borrowing residential development finance proposal that meets our standard lending criteria, residential property developers can access CBILS development finance through BLG.

Whether you apply for funding through the scheme or not, residential developers should put greater focus on contingency planning.

The additional challenges that have come about because of COVID-19 include higher employee sickness levels and the unavailability of key staff members. There may also be a loosening or tightening of restrictions on the number of staff, partners, and contractors allowed on site, which can delay building projects.

According to the government’s housing accelerator, Homes England, the pandemic has added between three to eight months to build times, delaying the completion of almost a quarter of a million homes.

BLG will work with you to find the best residential development finance solution to help you tackle the challenges that lie ahead.

Commercial Development

The demand for commercial premises is greater as businesses look to secure additional warehouse space to protect their supply chain from disruption risks and in response to the current boom in eCommerce.

Commercial property developers have access to BLG’s standard development finance solutions in addition to CBILS funding. Your business must have a viable borrowing commercial development finance proposal and meet our normal lending criteria to access development finance.

BLG is a specialist lender in short-term loans and is dedicated to supporting your individual needs with flexible loan structures for both new and existing customers.

Contact the BLG development finance team today to access funding for your next development project

WHAT OUR CUSTOMERS SAY ABOUT US

"A challenging site like no other with every inch of the plot being built on and 12 apartments built-out through a driveway 2.5m wide off of a main high street with limited access rights, not to mention all the complexities associated with 13 Party Wall Agreements. Most lenders would not have had the vision for the scheme or the confidence in Spiller Builders to build out the scheme.  I just wanted to say how helpful the entire BLG team have been during the build. A very approachable and knowledgeable team, with a “can do” approach to lending. We will be looking to do more business with you for sure."

“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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