The importance of a perfect finance application
It goes without saying that obtaining finance is a critical and often challenging step for any development project. It’s a very different prospect to a typical home loan application.
If you don’t have a strong track-record as a developer, securing finance approval may hinge on the quality and professionalism of your finance application.
The application matters greatly because lenders need to fully understand their potential risks, and the application will help them assess this risk and convince them of your credentials.
What to include?
What should a development finance application include? This, of course, depends on the size and type of the development. While this list is certainly not exhaustive, here are some of the main components that can form part of a professional loan application.
• Summary of the project highlighting the key points
• Detailed feasibility showing the profit potential (lenders will want you to use conservative figures and show plenty of breathing room if things don’t go to plan)
• Full set of costings
• Information about the site and its zoning
• Your credentials as a developer
• Your financial contribution
• Experience and expertise of your team
• Project timelines
• Exit strategy
• Evidence of pre-sales (if required)
• Signed builder’s contract
• Necessary documents (such as the DA consent and council stamped plans)
Getting help to save time and ensure success
Given the importance of, and the level of detail required for, a development finance application, it certainly pays to have an experienced broker on your side. Your broker needs to understand exactly what lenders look for when lending to a development project.
By keeping the lender’s criteria and expectations front-of-mind when compiling an application, you’ll have a better chance of the processes running smoothly. And this will help you avoid unnecessary delays and hopefully complete your project as quickly and efficiently as possible, which is what every developer wants.