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Paragon Bank is offering property development finance to experienced developers looking for loans between £500,000 and £10m.
The pricing is often between 6-7%, and the arrangment fee is 2% of the loan amount. The exit fee is typically 1% of the total loan, and a personal guarantee should be accepted although it will be limited to 20% of development and interest cost.
The bank is offering a maximum of 65% LTGDV/80% loan-to-cost. It will accept planning gains (where you buy somewhere without planning permission, and it increases in value) providing the client has a minimum of 10% cash in the deal.
Schemes are limited to 35 units, and no more than 40% can be for social housing. There is a £75,000 minimum unit value on resale.
Aaron Strutt, a director at Trinity Specialist Finance, says: “If you are looking to convert a house into flats or turn a property into an HMO, proving the loan is over £500,000 Paragon has a range of funding solutions.
“The bank prefers lending to experienced developers but can help borrowers if they have a designer/project manager with a strong track record.”
Paragon is one of the major players in the buy-to-let market and the bank knows there is a gap in the market because of the shortage of homes.
Call Trinity Specialist Finance to secure development finance on 020 7016 6151.