CrowdProperty, a UK property development lender, has launched a funding solution that eliminates retained interest, while streamlining the application process.
Dubbed ‘REAL’ – Residential Expertise Accelerating Lending – the new solution is designed to help developers overcome the challenge of slow and complex property development finance processes.
By eliminating retained interest, it allows applicants to access maximum capital from the start, with the potential to drive higher returns.
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Decisions and loans of up to £500,000 (or £750,000 in London) for bridging and light refurbishment projects typically happen within four to six weeks, and feature rolled-up interest, so more capital is accessible from day one.
Powered by BUILD, CrowdProperty’s in-house proprietary appraisal tool, the aim of REAL is to simplify the funding process, while enabling liquidity and financial efficiency.
“Property developers have been plagued by complex and time-consuming funding processes for too long,” said Damon Walford, chief commercial officer at CrowdProperty.
“When you combine this challenge with economic uncertainty, planning bottlenecks and supply chain issues, the impact can be catastrophic, particularly for smaller projects,” he added.
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CrowdProperty’s REAL uses a decade of data from over 15,000 funding applications, to help developers access streamlined decisions and finance.
“By rolling up interest instead of retaining it, REAL enables developers to optimise cash flow and focus on successful project execution,” Walford said.
Developers can use REAL for projects requiring bridging finance to complete outstanding work and light refurbishment, including flips.
For bridging loans, the total repair and development budget must be less than or equal to 10 per cent of the CMV (purchase and refinance) and purchase price (if purchased).
For light refurbishment, the total repair and development budget can be up to 50 per cent of the CMV, though we may use RICS plus an independent monitoring surveyor.
“Historically, it can take six to 10 months for developers to receive the funding green light to progress their plans,” said Walford.
“But with REAL, the funding application window is shortened, giving developers greater clarity on their outputs and empowering them to make informed decisions and keep projects moving.”
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