Commercial development

Minimum commitment

£250,000

Usual commitment period

1 year

Usual CTV

50% of gross development value

Percentage of costs

Generally, we will fund a maximum of:

• 40% of site / land costs
• 100% of development costs (including interest)
  (this will vary dependent upon the profit margin in the development)

Repayment source

We will lend subject to appropriate security and interest cover.

Otherwise, there must be committed pre-sales; or pre-lets to good covenants alongside a committed take-out, either by on-sale or refinance.

Site considerations

Within areas of relatively high employment in the Spanish. Large developments to be phased.
Proven demand from occupiers and investors.
Pre-letting often required.
Sites to have planning in place prior to lending.
As a guide we prefer projects to show a minimum target profit of 20% on costs.

Valuation/monitoring

Bank's valuer / surveyor to assess construction costs, development timetable and cashflow prior to drawdown and certify work (usually monthly) through each project.

Security to include

• First charge on property
• Floating charge (corporate borrowers)
• Assignment of building contract rights
• Collateral warranties from significant contractors/sub-contractors
• Personal Guarantees.
• Life cover