A challenge for developers: do you work with the high street banks offering limited funding levels or, do you use an independent commercial broker who can make it easier for you to understand and access the specialist development funders that have entered the market, offering funding levels of up to 75% of the sale value of your scheme?

There is an array of consultants that are employed by the residential or commercial developer to provide expertise to cover their development, construction and sales risk. It follows that the concept of working with and ‘employing’ a commercial funding consultant/broker to assist with the lending risk for a site is now accepted and growing. The days when the owners or finance directors could get the lending solutions they required from one high street funding source and then get on with the ‘day job’ of developing a successful project, do seem to be in the past due to the reduced risk appetite seen from the large retail banks. 

Every development is different and so ‘one size’ will never fit all. It is the role of the experienced, independent and specialist commercial finance broker to understand the myriad products available from lenders, the pricing in the market, terms and conditions of the loans available and importantly to work with the client and lender throughout, so that funding works effectively and the developer can deliver the scheme.

Excellent lender relationships are key to the broker. It is increasingly brokers that are tasked with sourcing the development funding a client requires, and they can only do this by understanding the offering of the many specialist funders in the market. For the lender’s part, a broker’s involvement should not only present them with a potential customer, but they should also be provided with the information they require to assess, price and progress the scheme in question.

Fundamentally, if new specialist development funders have been borne out of a gap in the funding market left by the high street banks, then specialist development finance brokers are gaining prominence for the same reason. An opportunity for clients, brokers and lenders alike.