Yann Murciano

A step-by-step guide to preparing a loan request



When it comes to getting finance, the entire process often depends on how well presented – or not – the application is. Yann Murciano, CEO at development finance and bridging lender Blend Network, discusses a step-by-step guide to preparing the ideal loan request.

There is no doubt that the development and bridging finance markets are seeing fast-paced updates as a result of Covid-19 and its impact on the housing market. The lockdown has meant that surveyors have not generally been able to physically inspect properties. As a result, many lenders have stopped accepting new loan applications, some have pulled out of deals and most have tightened their criteria to respond to ever-changing market conditions. For borrowers to improve their chances of getting funded, they need to put together a solid loan request. Most lenders will want to see experience, and, now more than ever, a consummate loan request can make or break a deal. This is because the way an application is presented will send a clear indication to the lender as to whether the borrower is sophisticated enough to drive value throughout the project and achieve the GDV.

At Blend Network, we remain open for business and actively looking to fund deals. Therefore, we wanted to share our guide to preparing the ideal loan request. What borrowers will find below is a simple process containing the information they you need to provide to any potential lender, including us. 

As a first step, a lender will need the borrower to send them the following:

  • The project address 
  • A brief project description 
  • An appraisal  
  • A brief CV with a track record of completed projects

Let us break down each item and provide some examples.

1.The project address 

The location of the project is crucial. The same property on different roads within the same area can have different values. The exact address helps the lender understand the setting, the local economy, and, ultimately, the developer’s goals.

2. A brief project description 

  • Does the borrower own the site or are they looking to buy it?
  • What is the current use and what is it being converted to?
  • Is planning in place? (provide the planning preference)
  • What is the exit strategy?
  • How much are you looking to borrow?
  • For how long?

These are some of the questions the borrower will be asked. The more information the borrower provides on their initial enquiry, the better it can be assessed by the lender. Lenders tailor the loan offer based on the borrower’s requirements, so it is important that they clearly explain the cycle of their project. 

3. An appraisal

At the initial stage of the loan request, all the borrower needs to send are high-level appraisals. The following is a good example of what that might look like:
blend network table

Costs:

This explains how funds need to be allocated in the structure of the loan, the loan terms should clearly state how much of each item the lender is funding.

Schedule of accommodation:

This breakdown is crucial to understand the exit strategy, and makes it easy to look at comparables to ensure the liquidity on the exit is there.

4. A brief CV with a track record of completed projects

Lenders don’t need the borrower’s autobiography. They only need the main highlights of their property career. 

For example: 

I have been a BTL landlord for the past 10 years. Since 2016, I have been developing small sites and projects completed include:

  • 2016/2017: conversion of a pub into three flats, purchased for £100k, spent £100k, GDV £300k
  • 2018/2019: Two new-build houses, purchase price £50k, cost £200k, GDV £400k

Or

I have been a contractor for the past 15 years and I am now looking to develop myself. I have completed the following projects for developers:

  • 2016/2017: conversion of a pub into three flats, purchased for £100k, spent £100k, GDV £300k
  • 2018/2019: Two new-build houses, purchase price £50k, cost £200k, GDV £400k

The above examples give the lender a good indication of where the borrower is in his property journey and the loan can be structured accordingly.

We hope that this quick guide is useful. At Blend Network, we are actively looking to fund deals across the UK regions. 


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