Alternative Bridging Corporation has overhauled its residential development finance proposition.
The new proposition brings residential development finance and development exit funding into one integrated structure.
Alternative Bridging now provides a single residential development finance product with interest priced from the Bank of England Base Rate (3.75%) plus 6.5%, with a maximum loan-to-gross-development-value (LTGDV) of 70%.
Construction funding is enhanced by a rolling construction float, which is deducted and repaid from each stage advance.
It says that it has been designed to support cash-flow throughout the build period while maintaining clear funding visibility throughout the life of the project.
Another feature of the revamp includes the automatic transition into a development exit loan following practical completion of the scheme.
This is included within the original residential development finance terms, which removes the need for a separate refinance application.
Once the development exit phase has been entered, the interest rate will be reduced by 1.5% p.a. for the remainder of the term.
The structure also allows for an extended sales period, which it says will give borrowers additional time to maximise sales proceeds.
Where further funding is required during the scheme, brokers can use the Alternative Overdraft secured against under utilised assets to top up the residential development finance facility.
At exit, borrowers also have the option to refinance onto an Alternative Term Loan for a period of two to five years.
The revised proposition is aimed at experienced developers and construction professionals seeking a joined-up funding solution.
Alternative Bridging Corporation director James Bloom says: “This is a fundamental change in how we structure development finance and it is one we are very excited to bring to the market.”
“Rather than treating construction, exit and longer-term funding as separate conversations, we have combined them into a single facility that runs from commencement of construction through to the final sale.”
“Pricing and terms are clearly stated and adjust to match the risk profile, giving brokers clarity and far more certainty of satisfying their clients’ requirements.”
