The Intermediary – February 2025 - Flipbook - Page 44
SPECIALIST FINANCE
Opinion
The right lender
makes a deal, the
wrong one breaks it
C
hoosing the right
lender is one of the
most critical decisions
in any development
project. The right
lender can provide
more than just funding – it effectively
becomes a strategic partner, offering
flexibility, expertise, and support to
help bring your vision to life.
On the other hand, the wrong
lender can derail your plans with
inflexible terms, hidden fees,
unnecessary stress or delays that
threaten the entire deal and eat into
your timeline and profits.
Choosing the right lender is
essential to making – or breaking – a
client’s development deal.
It has undoubtedly been a
challenging few years for UK
housebuilders, and access to finance
has not been easy. So, developers
would be forgiven for thinking that
securing financing is one of the
most critical steps in any property
development project. Yet, many
developers underestimate just
how much the choice of lender can
influence their project’s success.
A lender’s role goes beyond just
approving a loan application. They set
the terms that govern your project’s
financial foundation and directly
impact your ability to manage cash
flow, meet deadlines, and navigate
challenges. The ideal lender aligns
with your project’s timeline, scale,
and risk profile, ensuring you have
the resources you need when you
need them.
Getting it right
A good lender understands the unique
challenges of property development
and offers tailored solutions that align
with your vision. It will ensure that
funds are disbursed on time, helping
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The Intermediary | February 2025
you avoid costly delays, and can
provide expert guidance on navigating
financial complexities.
Taking days to pay a drawdown
certificate can impact the working
capital of the developer. Moreover, the
right lender fosters trust and a longterm partnership, which can lead to
beer terms and smoother approvals
for future projects.
In essence, the lender acts as an
enabler, turning development plans
into profitable outcomes.
The risks
Choosing the wrong lender can have
serious consequences that jeopardise
an entire project. Delays in fund
disbursement can stall construction
timelines, leading to increased costs
and missed market opportunities.
Rigid loan terms might leave a
client unable to adapt to unforeseen
circumstances, such as rising material
costs. Hidden fees and unclear terms
can inflate your financial burden,
eroding your profits.
An aggressive lender that decides
to enforce the security too quickly
rather than working with you to help
complete the project is a nightmare.
Additionally, lenders with lile
experience in property development
may lack the insight needed to support
the client’s goals, leaving them
without guidance when challenges
arise. Ultimately, the wrong lender
can turn a promising project into a
financial headache.
Factors to consider
Selecting the right lender requires
a careful evaluation of several key
factors to ensure they align with the
project’s needs and goals.
Start by assessing their experience
in property development – a lender
with industry expertise will beer
YANN MURCIANO
is CEO at BLEND
Find a lender that
not only meets the client’s
financial needs, but
also contributes to the
project’s overall success”
understand the complexities of the
project and offer practical solutions.
Transparency is equally important;
you should feel confident that all
terms, fees, and repayment schedules
are clear and manageable.
There are few things more
frustrating than terms that change at
the last minute. Speed and efficiency
in fund disbursement can make a
significant difference, especially for
time-sensitive developments.
Additionally, flexibility in loan
terms is crucial to adapt to unexpected
changes in your project.
By thoroughly considering these
factors, you can find a lender that not
only meets the client’s financial needs,
but also contributes to the project’s
overall success.
To conclude, choosing the right
lender is not just about securing
financing – it’s about finding a partner
that shares the vision and is invested
in its success.
Take the time to assess the options,
ask the right questions, and prioritise
transparency and flexibility. With the
right lender, your client can turn their
development plans into profitable
realities. ●
