Development finance is the most complicated of all property loans to calculate. There are many variables to consider, and these loans are underwritten more subjectively than a regular mortgage.
We use the same loan modelling process across all lenders to allow easy comparison between lenders. Each lender will have their own model, which will constantly be tweaked, so the loan figures provided on the Brickflow results screen may differ to the final quotes provided by the lenders. However, we constantly monitor our estimates against the actual quotes received to ensure any differences are minimal.
The main criteria to how a development loan is calculated are:
Loan to Gross Development Value (LTGDV)
Loan to Cost (LTC)
Minimum client equity contribution
Day 1 land loan cap
The lender determines the loan amount from a combination of the above factors and delivers a final combined amount. Other factors that can affect leverage and pricing are; micro geography, asset type, lender loan book exposure, development experience, build type and more.
How does the Brickflow loan application process work?
Once you have shortlisted your lenders and want to make an application you will be asked to complete further details on the project; your development experience, a development appraisal and property schedule. This will automatically be sent to the lender shortlist (up to 3 lenders), where these lenders are encouraged to submit their best loan terms.
These lenders will conduct a preliminary underwrite and offer their final loan terms, decline to offer or ask more questions. Once all the loan terms are received, borrowers can ask any questions to the lender or Brickflow. When you have selected your preferred option, that lender will move to their credit approval process.
Once the loan is credit approved, the lender will instruct their professionals; valuer, IMS and lawyers.
To sign up as a Brickflow user, there is a fee of £35 per month.
How do you rank the loans?
Loans are ranked in order, from largest to smallest. When the loan amounts are the same, the Brickflow software ranks them in price order, with the cheapest loan first.
How long does it take to get a loan?
Once you’ve selected your 3 lenders and your project goes live on Brickflow, bids can be received within as little as 2 hours. It normally takes up to 48 hours for all 3 bids to come in, and sometimes a little longer if it’s a complex case or there is incomplete information.
The info the lenders need is clearly detailed in the online Development Appraisal but primarily includes your development experience and a property schedule.
From submitting the application to full credit approval, it normally takes 2-3 days, although the quickest credit approval on the platform so far is 4.5 hours
Credit approval to loan completion is mainly dependent on your professional team. If your lawyer works quickly and collaboratively with the lender's professional team, you can complete 3-4 weeks later.
The industry standard to complete a development loan is close to 6 months. With good borrower co-operation, Brickflow can do it in 4 weeks from start to finish, but 8 weeks is more typical.
Can Introducers use Brickflow?
Absolutely. We work with estate agents, brokers, IFAs, architects, lawyers, and any other property professionals. Click here to go to our Partner page.
Brickflow receives a commission from the lenders, but only on completion of the loan. We are therefore strategically aligned with our borrowers to ensure their loan completes successfully.
Any commissions are built into the results you see on screen and will be included in the loan bids you receive in the Deal Forum and in the credit-approved loan offers.
The fee to sign up to use Brickflow is £35 per month.
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