Golden Trust Capital

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Why Choose Golden Trust Capital?

At Golden Trust Capital, we pride ourselves on consistency in principles and values. Building strong broker-to-client relationships is paramount, recognising that trust is integral in financial dealings. Specialising in development property finance ranging from £500,000 to £150 million, we offer competitive terms over 12 to 36 months.

Our expertise extends to serving small, medium, and large regional developers who may face challenges with regular high street lenders. We bridge the gap by speaking your language, ensuring even new developers fully understand their financing options. For larger development companies, we offer comprehensive support, providing tailored development finance solutions across the United Kingdom.

Whether you're an experienced property developer or embarking on your first project, our specialists are ready to source, negotiate, and deliver an excellent deal for you. With unique relationships with lenders, Golden Trust Capital often creates building development finance packages with a higher degree of flexibility. This results in a higher loan to gross development value and a higher loan to cost ratio, ultimately minimising the developer's cash contribution to a project. In some cases, we can source equity and fund the entire project with 100% debt and equity funding. Choose Golden Trust Capital for a seamless journey to financial success in the world of property development.

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What is development finance?

Development finance comes in many forms. In essence, this type of borrowing is used to fund the building or significant refurbishment of property; from conversions to complete renovations.

Most development finance loans are short-term and last only until the building project is complete. Still, terms can vary significantly from a few months to several years on larger commercial development projects.

The loan is repaid when the build has finished, typically by selling the finished property or refinancing through a longer-term mortgage. This exit strategy is a vital part of the development finance application process.

Why Use Development Finance?

There are many obvious advantages when it comes to utilising development finance to fund a project. Even if you have the amount of cash needed already available, it is worth looking at the benefits of a development loan for at least part of the project.

The pros of development finance include:

Having access to funds for development purposes allows borrowers to take on bigger projects than they would usually be in a position to finance.
Helps to maintain a healthy cash flow until the development has been sold.
Enables developers to fund multiple projects at the same time and negates the need to wait for one project to sell before being able to start the next one. Access to vital funds will ensure you do not miss out on any development opportunities that may come your way.
The less capital you put into the project, the higher the return on investment (ROI) will be. You will need to consider the finance costs, which will be taken from the profits, but as your personal investment is smaller the return on the invested amount will be higher.

Types of Development Finance

When looking for development finance it is important to identify the type of project being planned by the developer in order to access the correct funding product. Types of works can include:

Ground up builds
New builds nearly always require development finance loans. Once the project is completed, developers may use development exit finance as a more cost-effective solution, but this cannot be done before the project is watertight.
Large scale restoration and property conversions
For this type of project refurbishment finance is typically the correct type of loan to use, however if the project is larger than the norm, development finance may be a better alternative.
Property refurbishment
A refurbishment loan, which is a type of bridging finance, is generally used for property renovations. It can be used for various improvements including, installing a new roof, general structural changes, building an extension, refurbishment and decoration.

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How is Development Finance Repaid?

Development finance loans are typically paid in one of the following three ways:

1. Paid in full

The total loan amount is paid in full, using the profits, when the project is complete, and the properties have been sold.

2. Refinancing using a long-term loan

This usually happens when the developer wants to keep the development for either personal use or for rental purposes.

3. Refinancing using a Development Exit Bridging Finance

This type of short-term loan is often used to fund a new development project before the current project is sold. It can also be used to give developers a bit of breathing space to complete minor works and find buyers.

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When should I commence the application process for my Development Loan?

Once you have your land/plot in place and have a good knowledgeable idea of the costs associated and the final values, it is then time to give us a call or send an enquiry over to discuss your development project. During the call we will discuss your finance requirements and gain enough information to be able to research what lender best fits your needs.

What information will I need when I put in my application?

We will require the following (some of this can be sent at a later date but it is always best to have this prepared):

A full market appraisal of the development
Current value of your property/land if you own it
A full cost breakdown for the development/renovation/conversion/build
Details of any contingency plans and costs associated
An expected timescale for the development/renovation/conversion/build
Anticipated final value of the project
Any past experience the developer may have in projects especially in property development. This can be in the form of a CV of past projects
A list of professionals and specialists who will be involved in the project, e.g., building contractors, architects, site managers etc.
Any planning permissions documents needed for the development build or renovation
Copies of the building regulations for the development/renovation/conversion/build
Planning restrictions or Section 106

What are the stages of development finance lending process?

Below are the stages from the first initial enquiry to draw down of completion when applying for a development loan:.

Enquiry - Once a developer has found suitable land/plot and planning permission has been obtained, it is a good time to Golden Trust Capital to enquire about development finance.

Indicative Terms- After your initial consultation with one of our team, and you are satisfied the lender and initial product discussed (subject to change), you will be provided with the indicative terms from the lender. This is normally received within 24 hours from initial the enquiry.

Agreement in Principle - in the Agreement in Principle, the lender will outline the offer for finance, incorporating the fees that will be associated with the deal. This offer will be subject to a number of conditions including, some of the documents we outlined above.

Site Visit - In some cases, but not all the lender will request to visit the site, meet you and the professional contractors you have assigned to the project.

Underwriting - Your loan application will now be fully underwritten, at this point the lender may request further information, once satisfied the contract terms will be confirmed incorporating all costs and fees.

Valuation - The valuation/survey of the property has to be carried out by a professional surveyor. At this stage they will evaluate the viability or the project and potential profit.

Offer - Once the lender is satisfied with everything provided you will receive a formal offer. At this point it will be sent to your solicitor who is acting on your behalf, who will have a full understanding of the legal processes of development finance. Please ensure you select solicitor with experience in development loans to prevent any delays.

Completion - Once completion has taken place the funds will be released

What loan amount can I get access to?

The loan amount differs and is dependent on the type of development/renovation/conversion/build project. Once Golden Trust Capital have researched the funds you will need to suit your project, we can structure your finance requirement to meet your needs.

What costs and fees are associated to a development loan?

As with any finance, it is vital to bear in mind any additional costs associated with the loan. Some of the costs and fees include:

Professional fees- As with any development you will need to rely on your professional contractors during the development process. You will therefore need to think about the fees, builders, architects, solicitors etc. will charge

Set up costs - This is a charge that the lender will charge and is normally calculated as a percentage of the entire loan amount. In most cases it is set at 1% or higher and normally added to the total amount to be repaid.

Exit fees - Again charged by the lender, this is again based on a percentage of the total loan amount or the final value of the project. In most cases this is 1% or higher.

Interest - In most cases there is a monthly interest charge which increases as funds are released. In most cases the amount of interest is added to the loan which is often know as 'roll up of interest'.

Contingency/Emergency costs - This is funds set aside to cover any unforeseen or sudden expenses. It is always advisable to have an average amount of 15%-20% of the development's total cost.

What does a Fixed Price Contract refer to?

A fixed price contact is a contract between you are your builder that will fix any costs that will be payable and will not change. Even in the event of additional or unexpected costs. This is beneficial for both the developer and builder as it allows the builder to charge higher fees. In turn the investor will know upfront exactly the costs with no surprises. You will also find that development lenders are happier with fixed price contracts and therefore more willing to lend.

What planning permission is needed?

Outline planning permission - this type of application will negate the requirement for the prep of detailed plans for the development of land and conversion of properties. With outline planning permission you can reserve one or a number of the following: design, siting, external appearance, means of access, landscaping, until you apply for full approval. Outline planning permission is valid for 3 years but in some cases can be stretched to 5 years.

Approval of Reserved Matters - Approval of Reserved Matters is required once the application of outline planning and lays out any remaining details of the proposed development. You will need to make this application no later than 3 years after outline consent has been given.

Full and Detailed Planning Permission - When developers are ready to proceed, they will be able to apply immediately but will be required to provide a very in-depth development plan. Once permission has been granted the development can commence straight away. Please note that you will may not need to apply for outline planning permission prior to applying for a DPP.

Section 106 - The Section 106 of the Town and Country Act 1990, permits authorities to enter into a planning obligation or legally binding agreement with land owners by granting planning permissions. Section 106 agreements address any essential issues to ensure a development is viable in planning terms.

Will Building regulations need to be followed?

It is essential to comply with building regulations and ensure you get the correct and relevant planning permissions in place. You will need to contact your Local Authority Building Control Service to get the Building Regulation Approval. This is of the upmost importance as you are completely responsible for complying with building regulations if you are in fact doing the build yourself. If you are employing a professional building contractor to do the work then the responsibility should fall on them. But please be aware that it ultimately the owner who is responsible and could be served with enforcement notices if it is found that any regulations were not adhered to.

What is NHBC, Build Sign Off or Architect Certificates?

National House-Building Council (NHBC) is a provider of insurance and warranties for new homes that is completely independent. At each point of the development process, it is a requirement that professional checks to safeguard that all building regulations have been observed and that any works have been completed to a satisfactory standard that meets requirements. This is normally done through the NHBC or you architect.

Development Finance