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 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.
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