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Commercial Development Finance

Commercial Development Finance

by | May 31, 2019

Commercial Property Lending

We specialise in providing tailored commercial property financing solutions for developers, business owners and intermediaries involved in the construction, conversion, or renovation of commercial properties. Our extensive portfolio of commercial development loans is designed to support projects across England, Wales, and other high-demand areas.

One of the key benefits of working with us is our flexibility regarding the scale of your commercial development. We impose no limits on the number of units you plan to create, thanks to the robust security provided by our loans, which are fully backed by 100% collateral on the development property. This ensures a solid financial foundation for your project, allowing you to focus on its successful completion.

Whether your project involves mixed-use spaces or dedicated commercial ventures, we are equipped to offer the financing you need to advance your development. We are committed to providing the financial resources and expert support required to turn your commercial property vision into reality.

24 months

Build duration generally up to 24 months but longer terms may be possible

65%

Lending to 65% Gross Development Value

£10,000,000

Loans from £1,000,000 to £10,000,000

Commercial Development Finance
four storey corner building with balconies
Modern stone building

Commercial Land Lending Conditions 

Our commercial property finance loans offer:

  • Lending to 65% Gross Development Value or 70% if pre-let.
  • Loans from £1m to £15m.
  • Lending for build duration typically up to 24m, but longer terms can be considered.
  • Your monthly interest can be added to the loan, so you have no payments during the loan term.
  • Commercial development loans (pre-let and speculative)
  • Commercial bridge to enhance / obtain planning
  • Occupied or vacant

Your Commercial Development Application

We specialise in assisting clients with their commercial property lending needs, offering comprehensive support in assembling the essential elements required for a successful application. When seeking commercial property development finance, one key strategy to increase your chances of approval is minimising the lender’s perceived risk. Achieving this entails furnishing a thorough project dossier, complete with detailed information about the project itself and the experience of your team.

A critical aspect of your financing approach involves having a well-thought-out exit strategy. While it’s common for a commercial land loan to be contingent on pre-lease or pre-sale agreements, we stand out by extending speculative commercial development finance options for specific property types and in select geographical regions. This means that even if you don’t have pre-existing lease or sale commitments in place, you may still have access to the funding you need to bring your commercial development aspirations to life.

Our goal is to provide you with the financial resources and expertise necessary to navigate the complexities of commercial development loans successfully. By proactively addressing risk factors, offering flexible financing solutions, and considering speculative projects, we aim to be your trusted partner in realising your commercial property development ambitions.

Commercial Property Development Finance From BLG

BLG extends a comprehensive array of commercial development finance solutions catering to various property types, including offices, industrial buildings, mixed-use commercial and residential structures, and farm buildings. Additionally, we offer property lending support for the conversion or refurbishment of shops and pubs, as well as land acquisition with existing commercial property planning in place.

Our commitment to providing competitive pricing in the realm of commercial property finance is unwavering. As a result, we approach each project individually, customising our financing solutions to align with the unique requirements of each endeavor. We understand that every project has distinct characteristics, and our tailored approach ensures that your financing package is optimised for success.

Should your financing needs extend beyond the realm of commercial properties, such as office blocks, shopping centers, apartment complexes, and industrial parks, rest assured that BLG also offers residential development finance. This residential financing segment encompasses four categories: stretch senior, build to let and mezzanine development finance. Contact a BLG to gain deeper insights into how we can support and enhance your next project, regardless of its nature. Your success is our priority.

What Is Commercial Development Finance?

Commercial development finance is a form of financing that is used to fund the costs associated with the construction, development, or renovation of commercial properties. It includes loans, grants, and other forms of public and private financing.

Who Typically Uses Commercial Development Finance?

Commercial development finance is often used by developers and investors who are in the process of purchasing, constructing, or renovating a commercial property. It can also be used by businesses that need funding for business expansion and renovation projects.

What Types Of Projects Can I Use Commercial Development Finance For?

Commercial development finance can be used to fund the development of a variety of different types of commercial real estate projects, including office blocks, shopping centres, apartment blocks, and industrial parks.

How Does Commercial Property Development Finance Work?

Commercial property development finance works by providing a loan to the borrower based on their anticipated future revenue from the project. The loan is typically drawn down in stages as different milestones of the project are completed and to cover the development costs, such as the purchase of land, construction, and other associated costs.

What Is The Cost Of Commercial Development Finance?

The cost of commercial development finance depends on a variety of factors, including the size and complexity of the project, the lender’s risk appetite, and the borrower’s creditworthiness.

Do I Need Planning Permission To Get Commercial Development Finance?

Yes, you will usually need to submit for planning permission before you can apply for commercial development finance. Any offer would then be subject to obtaining the planning permission. Any variation in the final planning approval would then potentially require a change in any loan offer. Obtaining planning permission is a lengthy process that involves submitting an application to the local authority and meeting local government regulations. It is important to ensure that your project has been properly planned and that you meet all the necessary requirements before applying for finance.

Contact Us Today

    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.”

    Tell us how we can help you.

    Build To Let Development Finance

    Build To Let Development Finance

    by | May 31, 2019

    Build To Rent Development Finance

    BLG provides dedicated build to let development finance, a specialised loan designed specifically for experienced property developers and landlords. Our tailored financing solutions are crafted to support your build to rent projects from start to finish. Whether you need funds for construction, renovations, or project completion, BLG is here to help you bring your rental properties to market efficiently and effectively.

    This type of property development finance was explicitly created to help developers build projects that meet the needs and lifestyle of renters. These rental property developments often focus on making small communities with shared areas for socialising, which may include communal lounges, dining areas, outdoor spaces, and gyms.

    70%

    Lending up to 70%, including interest, open market value

    75%

    75% restricted investment value

    £10,000,000

    Loans from £1,000,000 to £10,000,000

    BLG Development Finance funded site_NrCoventry-min
    New build
    Commercial Development Finance

    The funding you need:

    • Lending up to 70%, including interest, open market value or 75% restricted investment value
    • Loans from £1,000,000 to £10,000,000

    When you are building to let:

    • Available for schemes with three or more units
    • Residential: houses, flats, new build, conversions and mixed-use
    • Property across the UK in areas with strong demand
    • Projects must have planning in place
    • Loans 100% secured on the development property

    How Does Build To Let Work?

    Build to Let finance is available to professional developers and landlords. The loan terms are typically up to 24 months with an exit plan, which is usually dependent on the properties being let and generating a rental income. When the exit plan matures, refinancing takes place, moving the lending to a Buy to Let mortgage. The same lender or another might provide this mortgage.

    Difference Between BLG & High-Street Banks

    Property development loans for build to let projects are either not available through the traditional high-street bank network or are challenging to attain. Securing this type of lending through a bank can take a considerable length of time, holding up projects and increasing the overall development costs.

    High street lenders may only offer a low percentage of the development costs, which might mean sourcing secondary finance to cover the shortfall. They may also only release funds in stages, further hindering the developer’s progress.

    Specialised property development finance lenders aid the financing route for developers who:

    • Have experience in property developing or building
    • Intend to undertake a Build to Rent project that is located across the UK
    • Have planning permission for three or more units, which might include houses, flats, conversions, new builds, and mixed-use properties

    Developers will need a strong business plan, rental projections, occupancy forecasts, and a rental and sales valuation to complete a successful application process.

    BLG specialises in Build to Let finance and can help developers secure finance for their next rental development. We will help you get access to the best deals and rates with loans from £1,000,000 to £10,000,000.

    To find out how BLG can help you get the build to let development finance you need, please contact our team today.

    Contact Us Today

      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.”

      Tell us how we can help you.

      Mezzanine Development Finance

      Mezzanine Development Finance

      by | May 31, 2019

      Connecting Developers With The Right Mezzanine Finance Provider

      While BLG does not directly offer standalone mezzanine development finance, we can assist you by connecting you with reputable independent funders who specialize in providing mezzanine funding. This supplementary finance can play a crucial role in advancing your property development projects. Our strength lies in our ability to collaborate with a carefully curated network of mezzanine funders.

      Although the specific terms and conditions of the loans are negotiated individually with these providers, we can offer you a comprehensive overview of the typical terms and conditions you might encounter. This information will help you navigate the process with greater clarity and confidence.

      12-24 months

      Terms between 12 and 24 months

      90%

      Up to 90% loan to cost
      Second charge, 100% secured on property

      £3,000,000

      Loans from £100,000 to £3,000,000

      Farmhouse with blue wooden cladding and spacious driveway
      front of a 3 storey block of flats
      Modern house with brickwork, large windows and balconies

      Mezzanine Debt Finance Overview:

      • Loans from £100,000 to £3 million
      • Up to 90% loan to cost
        (70% loan to Gross Development Value)
      • Terms 12 to 24 months
      • Loans can include part of the land purchase cost
      • Second charge, 100% secured on property

      Mezzanine Finance Funding Criteria:

      • Residential: houses, flats, new build, conversions and mixed-use
      • Property with a commercial aspect considered
      • Property across the UK in areas with strong demand
      • Sites to have outline planning in place.

      What Is Mezzanine Development Finance, And What Is Its Purpose?

      Mezzanine development finance, often referred to as a mezzanine loan or mezz loan, represents secondary debt financing that is extended to property developers with the primary aim of supplementing the existing financing for a development project.

      Mezzanine finance in property development is a specialised form of financing that plays a pivotal role in facilitating complex real estate projects. It derives its name from the fact that it occupies a middle or “mezzanine” position in the capital stack, which includes senior debt (such as traditional bank loans) and equity investment. To understand it better, let’s delve into the details of what mezzanine finance for property development entails:

      1. Additional Capital: Mezzanine finance provides property developers with an additional source of capital, often in the form of loans. This capital is typically used to bridge the gap between the equity invested by the developer and the senior debt secured from traditional lenders. Mezzanine lenders take on a higher level of risk compared to senior lenders, which is reflected in the interest rates and terms they offer.
      2. Risk and Reward: Mezzanine financing is considered a riskier form of lending because it is subordinate to senior debt. In other words, if the project encounters financial difficulties or defaults, the senior debt holders get paid before the mezzanine lender. To compensate for this added risk, mezzanine lenders typically charge higher interest rates than traditional lenders. However, in exchange for this higher risk, they also stand to earn potentially higher returns if the project is successful.
      3. Flexible Terms: Mezzanine loans often come with more flexible terms than senior debt, making them attractive to developers. These terms can include things like payment structures, interest rates, and maturity dates. The flexibility allows developers to tailor the financing to their specific project needs.
      4. Project Enhancements: Mezzanine finance is often used to enhance a project’s overall capital structure. Developers can use these funds for various purposes, such as acquiring additional properties, covering construction costs, or even as working capital to manage day-to-day expenses during the development process.
      5. Cash Flow Improvement: Mezzanine finance can also improve a developer’s cash flow. By securing mezzanine loans, developers can reduce their immediate equity contribution to a project, freeing up capital for other investments or future developments.
      6. Scaling Opportunities: Developers can leverage mezzanine finance to take on larger and more ambitious projects than they would be able to with just senior debt and equity. This opens up opportunities for growth and diversification within the real estate market.

      In summary, mezzanine finance in property development is a strategic tool that helps developers bridge the financing gap, enhance their capital structure, and pursue larger and more lucrative real estate ventures. While it carries higher risk, its flexibility and potential for increased returns make it an attractive option for experienced developers looking to optimise their project financing. However, developers should carefully consider their financial strategy and risk tolerance before engaging in mezzanine financing.

      This financing instrument serves as a valuable tool for property developers, primarily by enhancing their cash flow and enabling them to explore additional development opportunities. If you’re seeking further insights or looking to advance your next residential project, please don’t hesitate to get in touch with BLG today. We’re here to assist you in achieving your goals.

      Contact Us Today

        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.”

        Tell us how we can help you.

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