How much can I you borrow on a development loan?

For development loans, we lend a maximum of 70% loan to gross development value (LGDV) and a maximum of 85% loan to cost (LTC) (the cost figure is inclusive on interest and fees).

How do you structure your development loans?

Our development loans are funded top down (or backwards). In other words, we require developers to invest their equity first, and our development loan makes up the difference in costs so the project is fully funded on day-1.

A typical development loan would be funded as follows:

• 100% of the construction costs

• 100% of the interest reserve and fees

• The difference up to 70% LGDV / 85% LTC the land loan

What is Gross Development Value (GDV)?

The Gross Development Value (GDV) is the estimated market value of the complete development.

How much profit should my development be projected?

We expect developments to show a projected profit on costs (all costs) of 15% to be eligible for development finance.

Do you lend to first time developers?

Yes, we lend to first time developers who work with a strong professional team, have a least some industry expertise and who have a strong development project.

How long do the construction loan drawdowns take?

The appointed monitoring surveyor will undertake a site visit and assess the value of works that have taken place over the month prior. The monitoring surveyor will issue us with a report confirming the value of works within 1 day of the site visit. We aim to release the approved sum on the same day as we receive the report.

What type of developments project to do lend to?

We lend against all forms of development, this includes new build, conversion, light and heavy refurbishment and permitted development.

What developments sectors to do lend to?

We lend against all types for development projects throughout England. These include Residential, Mixed-Use, Office, Commercial, Retail, Industrial, Hotels, HMOs, Student Accommodation, Care Homes, Nursing and Retirement Living.

What information will you require to be able to make a development loan offer?

We will need all information in relation to the development project. This will include:

• The purchase price or current value of the property/land

• A schedule of works and construction program

• The gross development value (GDV)

• The projects contingency allowance

• Construction costs plan and breakdown

• Your professional team, if known (contractor, structural engineer, architect etc.)

• A copy of the relevant planning permission/application

• Your exit strategy (sale, refinance etc.)

• Development appraisal and cashflow

• Details of your background and development experience

See our Development Finance Borrower Guide for a detailed breakdown.

What if I need to extend the loan?

We understand development projects encounter unforeseen and uncontrollable delays. We will therefore endeavour to continue to support you and your project.

What happens if there are construction cost overruns?

If your development project is coming in over budget we can explore a few possible solutions:

• You can request to draw down from the project’s contingency allowance (this is typically 5-10% of the projected construction costs).

• We will review your project and where possible provide you with a construction facility increase to cover the cost overruns.

• Where neither of these options are possible, as the developer, you maybe required to invest additional cash equity into the project to cover the cost overruns.

Do you offer development finance for projects that have already started?

Yes, we do offer development finance on a case-by-case for projects that have already started. Given the higher construction risk will carry out enhance due diligence on the project.

Can I use multiple properties as security for one development loan?

Yes, we can take additional security where required.

How flexible are the drawdown schedules?

While a drawdown schedule is agreed at the beginning of a development project, we understand costs and schedules inevitably change. We therefore offer borrowers flexibility with respect to drawdown amounts, timings and frequency subject to our monitoring surveyors’ approval. Any significant delay or deviation may require a review.

Do you require a monitoring surveyor?

Yes, we will appoint a project monitoring surveyor to monitor the construction works.

Our monitoring surveyor will undertake an initial monitoring report to satisfy us that the projected build costs are sufficient to complete the development. We instruct the monitoring surveyor as the same time as we instruct the valuer to ensure there are no delays.

Our monitoring surveyor will then undertake monthly monitoring reports (or more if you would your additional drawdowns) to confirm the construction progress and the value of the works undertaken since the last visit.

You will be need to pay for the initial monitoring surveyors report fees upfront. The monthly monitoring surveyors fees however are accounted for as part of your development loan facility.

How can I apply for a development loan?

To apply, call us on 0207 459 4562, email us at contact@teloscapital.co or fill out our Development Loan Application Form.

If your loan meets our lending criteria we will start the application process. For more information about this process see our Development Loan Application Process.