The newer entrants into the development funding sector have tended to target more aggressive lending and have championed a product known as stretched senior. Effectively this means that the funders will look at 85-90% of costs as long as this does not exceed 70-75% of GDV.
These facilities are typically priced with 2% lender entry fee, 10-12% pa interest rate and a lender exit fee of 1%. Given the additional risk that attaches to the higher gearing these lenders will not generally consider first time or inexperienced developers. They will focus their credit application on the borrower track record, asset and liability position and the profitability of the scheme.