Questions in Property Development Funding

From loan terms on property development funding to what is happening in the property market, we've rounded up the most common questions we get from our clients looking for commercial and development finance.

What type of funding do you offer?

Onyx provides commercial and property development funding for all types of projects from ground-up, refurbishments, bridging, and multi-site. Our business finance covers growth to acquisitions. We take a bespoke approach to every funding request to ensure a facility is shaped to meet your exact requirements.

What security is required?

We treat each loan individually however we typically look to take chargeable property security to support our loans. This can range from first charges over development sites, first and second charges over guarantor properties, company charges, and debentures.

What assets do you fund against?

We offer short-term loans typically against property but also offer loans to high net worth individuals (HNWs) secured against specialist items such as luxury cars, watches, and fine art.

Do you recommend third-party professionals?

Borrowers often ask if we can put them in touch with other property professionals such as - solicitors, valuers, estate agents, accountants, etc – we are always more than happy to do this on the basis that value is added for both parties.

What is the drawdown notice period?

We require 15 working days from the submission of the drawdown unless formally requested beforehand and approved by the lender. This allows the monitoring team to analyse the information submitted and organise a site visit before the funds are released.

How does the drawdown process work?

All work is back funded from work completed onsite. If there are any packages which

need forward funding we will require an invoice and pay directly to the supplier.

What are the typical loan terms?

For Property development funding we generally offer the following:

We lend up to 75% of the gross development value, with funding used to contribute to both the purchase and build costs.
With rates starting from as low as 1.25% per month, you’ll be hard-pressed to find better value.
Funds up to £10m+ – whatever the size of your project, we have the resources to help you develop it.

Business development loans for growth and acquisition tend to see the following terms:

We offer commercial facilities from £50,000 to £5 million.
An interest rate from just 1.25% per month.
Repayment terms typically range between 1 to 3 years.

All loan terms however will be discussed on a case-by-case basis.

How is interest calculated?

All interest is calculated daily. This amount is then added to the total loan balance to be paid upon completion and sale of the development, or via the terms agreed with Onyx at the start of the loan if different.

How can a loan balance be checked?

All Onyx clients will have access to a facility tracker detailing all capital and construction drawdowns to date. It is possible to request a statement at any time with a breakdown of capital and interest.

Can a loan be redeemed before the availability period is up?

Clients have the right to repay their loans at any time without any exit fees. This is, however, subject to a minimum period of interest. You will need to contact Onyx to request a redemption statement and proceed to payment after this. It is worth noting also that any delay in making this payment may incur extra interest charges.

What is the recommendation around exit strategy/repaying Onyx at the end of the loan?

We always encourage borrowers to think about their exit strategy as early on in the build as possible and engage with long-term lenders if they want to retain properties or good-quality estate agents if they’re looking to sell them. A decent online and offline marketing strategy is key for the latter.

What are your thoughts on current conditions in the property market?

High-quality, new build stock always demands a premium in the market. With Onyx property development finance, you can rest assured your loans with us are safe as we are unaffected by market fluctuations. See how interest rates affect market financing.

Onyx Property Finance are experts in providing financial solutions for property developers. We are dedicated to keeping on top of market trends and ensuring our customers are kept informed of any changes that might affect their borrowing, projects, and investments – see our blog for all the latest insights.

Speak to an expert today and get up to 100% of your purchase and build costs with fixed interest rates for the lifetime of your loan: info@onyxmoney.co.uk.