Securing funds for ongoing and upcoming projects is never an easy task for builders and developers. Be it small-time developers or high-end builders, getting funding from investors or lenders is never an easy task. It is challenging for small builders and developers due to various market factors such as the monopoly of big developers, the rising cost of property prices and strict lending criteria. To add to that, the process of securing funding is long and tiresome, often filled with endless meetings with potential investors, bankers and lenders. However, there are various platforms and online tools which can help developers and builders get funds seamlessly. Whether you are a new developer or an experienced builder, here are some ways to secure 100 per cent funding for any upcoming property development projects.
Joint Venture Finance
Joint venture finance has always been popular among property developers and builders. In simple words, a joint venture is when two or more groups of developers and builders put their resources together to fund a new project up till completion. If developers are interested in raising finance for property development, joint venture financing is a great option. This form of financing can be used for upcoming projects, ongoing projects, residential and commercial properties, and extensions. One of the best features of joint venture financing is that developers and builders can get 100 per cent financing from just one source, making repayment and profit-sharing much easier.
Multiple lending and funding websites have come up in the UK solely dedicated to providing funds to property developers. Sqft.Capital is one such website that has been created to secure funding for UK property developers efficiently and seamlessly. Sqft.Capital allows developers to use a free modelling tool that converts data into presentable information for lenders. This company prides itself on providing funding that has the lowest equity requirement with the highest profitability. Developers can choose from various types of funding such as 100 per cent development finance, Mezzanine debt, bridge facilities, preferred equity, side by side equity and even short term equity. Also, Sqft.Capital can secure funding with zero equity requirements, which means 100 per cent loan to cost funding!
Crowdfunding has recently become popular among the development community, as more and more real estate crowdfunding platforms and websites have popped up in the market. Some websites focus on finding multinational companies and night net worth individuals to invest in upcoming development projects, while other websites help developers find angel investors. Some platforms help developers fund their projects using equity fundraisers as well as peer to peer lending options. However, developers and builders need to remember that securing 100 per cent of funding from crowdfunding platforms and websites depends on the builder’s reputation and the company’s brand name. For a reputable and experienced developer, securing 100 per cent funding from crowdfunding platforms should be simple.
For debt financing, a builder or developer will borrow money from a lender or an investor, which is to be repaid later along with regular interest payments. The lender does not have any equity or stake in the project or business, so this is an excellent option for builders and developers who do not want to give up equity stakes or ownership of their business. Whether or not a developer can secure 100 per cent funding from debt financing is based on the project’s features. Usually, lenders look at factors such as the project’s size, projected sales figures, timelines, feasibility, and, of course, the developer or builder’s brand name and reputation.