Types Of Borrowing
Bridging Finance
Description:
Flexible short-term finance designed for both experienced and inexperienced property developers/investors, allowing borrowers to access funding within 2-4 weeks if required. Archway Capital Partners maintains great relationships with over 100 bridging lenders across the UK, with all of these funders possessing a variety of specific bridging specialisms.
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Bridging Finance can be secured anywhere between 50-75% LTV in most scenarios, depending on what’s being prioritised by the borrower. Archway Capital allows borrowers to access short-term finance for purely residential, semi-commercial and fully commercial assets of any construction type and property condition. The bridging market has seen a vast amount of new lenders enter the sector over the last 10 years, so we've therefore increased our efforts to understand and document these new market entrants and share their exclusive product criteria as soon as it becomes available to the market.
Types:
Auction Purchase, Below Market Value (BMV), Bridge To Development, Bridge To Let, Bridge To Sell, Development Exit, Finish & Exit, Pre-Planning.
Development Finance
Description:
Available to both experienced property developers and first-time developers across the UK, Development Finance can be sourced up to 70% LTGDV/90% LTC as a maximum with more attractive pricing available at lower LTVs (taking into account a lender’s appetite to risk) on either fixed or variable rates.
We have access to 100+ Development Finance lenders with this number continuing to rise as new specialist lenders and banks enter the sector. Much like the various lenders operating in the Bridging Finance market, many Development Finance providers have niches, whether this is refurbs/conversions, ground-up multi-unit family housing schemes or even a sole focus on student housing developments (PBSA schemes). Furthermore, Archway Capital Partners are very well placed when it comes to arranging Development Finance, allowing borrowers to turn their attention away from the complicated and onerous funding process.
Types:
Apartment Schemes, Barn-Related Developments, Co-Living, Commercial Development (incl. Industrial & Logistics), Conversion, Ground-Up Multi-Unit Family Housing, Hospitality, Light/Heavy Refurbishment, Mixed-Use, Permitted Development, Senior Living, Student Housing (PBSA), Sustainable Incentives.
Mezzanine Finance
Description:
Although Mezzanine Finance is often seen as part of the Development Finance process, the market for this type of lending isn’t as saturated in comparison to other areas of property finance, making the utilisation of a broker even more important.
If a property developer doesn’t have enough equity available to them for an upcoming project, Mezzanine Finance can be sourced to ‘top up’ an existing development facility in the form of a second charge (ranking behind the senior lender). More often than not, Mezzanine Finance ends up being a deciding factor as to whether a project goes ahead because it allows property developers to inject less of their own equity, which in-turn frees up a developer’s funds for cash flow purposes or for other upcoming schemes.
Generally speaking, Mezzanine Finance can be sourced up to 80% LTGDV/95% LTC (taking into account senior debt) with varied pricing due to the smaller number of lenders operating within this sub-market. That being said, utilising Mezzanine Finance can sometimes work out cheaper than solely using senior debt, highlighting one of many benefits of this funding product.
Types:
Apartment Schemes, Barn-Related Developments, Co-Living, Commercial Development (incl. Industrial & Logistics), Ground-Up Multi-Unit Family Housing, Hospitality, Mixed-Use, Permitted Development, Senior Living, Student Housing (PBSA), Sustainable Incentives.
Joint Venture (JV) Equity
Description:
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We have access to JV Lenders which will take a view on borrowers which may have little, if any, experience operating as principal developers (assuming they have extensive experience working in the property sector as a QS, builder/contractor, previous employee of a large development company etc). Generally, however, JV Lenders require borrowers to have extensive experience operating as principal developers.
JVs can be structured in one of three ways:
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The JV Lender provides all of the necessary equity required for a scheme in exchange for a profit share (usually 50:50) with a senior lender providing the Development Finance covering anywhere between 50-70% LTGDV.
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The JV Lender provides all of the associated costs for a development (incl. build and purchase) in exchange for a slightly higher profit share (usually 60:40).
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For larger schemes (£10m+), most JV Lenders prefer the borrower to contribute at least 3-5% of associated costs, with the JV Lender then providing the remaining equity sum.
Types:
Apartment Schemes, Co-Living, Ground-Up Multi-Unit Family Housing, Mixed-Use.
Residential & Commercial Investment
Description:
Available on loan terms ranging from 1-30 years up to 75% LTV, Archway Capital Partners have access to a variety of lenders operating in the Residential & Commercial Investment space.
Whether you’re looking to refinance an existing facility onto a more favourable 5-, 7- or 10-year fixed loan (taking advantage of a lender’s new investment product); simply add a new residential property to your BTL portfolio; or whether you were looking to obtain funding for a complex residential investment (perhaps containing studio flats measuring in at below 30m²), we have you covered.
Lenders on our panel typically support the purchase of new investment properties and the refinancing of existing properties or portfolios. However, we also have access to lenders which are able to cover transactions of a more complex nature, including vacant residential/commercial, change of use, serviced offices, licences and short leases.
Types:
Buy To Let (BTL), Complex Portfolio, Holiday Let, House In Multiple Occupation (HMO), Long-Term Residential & Commercial Investment.
Sustainable Incentives
Description:
In response to national pressure to become net zero by 2050, several lenders have introduced pricing incentives to encourage borrowers to be more sustainable from either an acquisitional standpoint or during the construction phase of a development.
Most lenders evaluate these savings based on EPC ratings, with rate and fee discounts applied to units with EPC ratings of either A, B or C. Alternatively, if you’re a passivhaus, modular, or net zero carbon property developer, we also have access to specialist development lenders which can attach significant interest savings to their products in-line with your sustainable construction focus.
More and more lenders will be launching these sorts of products over the next few years. Furthermore, looking to the future, Archway Capital Partners will be at the forefront of Sustainable Incentives across the UK property finance market.
Types:
Apartment Schemes, Buy To Let (BTL), Co-Living, Conversions, Ground-Up Multi-Unit Family Housing, Light/Heavy Refurbishment, Mixed-Use.
