In essence this is the standard development product available from the mainstream, commercial banks. It is the most conservative product in the market and is generally restricted to 55-60% of the gross development value (GDV) – the trade-off is that it is also the lowest priced product in the market. Typically, you would be looking at lender fees of 1% – 1.25% entry fee, an interest rate of 4.5-5%pa and an exit fee of 1% of loan (not GDV).
As well as the low gearing against the project costs these lenders will also want a full application to cover the borrower’s financial profile, a track record of successfully completing previous projects of a similar nature and demonstrating the liquid cash to cover the client’s 40% input into the transaction (i.e. an equity gain on a site by obtaining planning or by simply holding it over a number of years will not be taken in lieu of an actual cash injection).