How to Prepare for a Property Finance Application

August 20, 2021
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As the age-old adage goes, ‘fail to prepare and prepare to fail’. This could not be more true when it comes to the need to move fast with a finance application and draw down the funds required to complete a transaction.  

A rushed application without the relevant information and documents can result in delays, stress, unnecessary back and forth and potentially (tragically) unsuccessful funding.

It is common for many investors and developers to be in a rush to arrange finance at the last minute due to the ‘deal of the century’ only being available for a seeming split second in time. If the investor/developer does not move fast, they stand to lose the once in a lifetime opportunity. However, going shopping before you know how much cash you have to spend is the same as putting the cart before the horse. 

Your finance broker advising on the best funding solution for you can only work with the information they are provided. The earlier you provide them with as much information as you can, the better. The advisor can then pinpoint with great accuracy which lender or funding partner would be most suitable for you and your circumstances.

Everyone has unique circumstances. From their own personal background, experience, financial setup to the type and size of the deal they are working on. Understanding all of this (and in particular the personal background, experience and financial situation) early in the process makes life easier for everyone when aiming to deploy funds in a smooth and swift manner.

For example, credit checks are normally carried out against your name when applying for finance. If a funder finds something on your record that was not flagged in the application process, a funder can decline your application in principle alone. The same funder may have taken a different view and allowed the adverse credit history if it was mentioned at the time of application.

Experienced investors and developers understand the importance of preparation and the benefits of making a great first impression. Being prepared and having all the information for your finance advisor brokering your finance prevents any unwanted surprises or outcomes.

Depending on the funding you require, the documents you need to prepare for your application submission will vary, however, below are a few items of what you can expect to provide:

  • Fact Find Form
  • Personal ID
  • Proof of income
  • Bank statements
  • Company structure details
  • Details regarding the purpose the funding
  • Information on the property
  • Details on how you plan to repay the loan
  • Property Portfolio Schedule
  • SALIE (Statement of Assets, Liabilities, Income and Expenditure)

If you require development finance, you will need to provide a full development appraisal including everything above in addition to:

  • Evidence of any previous development experience
  • Full details of the professional team involved
  • Details of the site and the desired project goal
  • Details of the planning consent including any restrictions, Section 106 or Community Infrastructure Levy requirements
  • Project drawings and plans
  • A full breakdown of the development costs
  • The gross development end value of the project
  • A clear exit strategy
  • A timeline schedule of the necessary work and build stages
  • A timeline for release of required funds
  • Financial accounts 

The funder can also request additional information as every application is treated on a case-by-case basis. Furthermore, it is not only crucial to provide the correct information and documents but to also present them in a comprehensive and organised manner that the funder can access and understand easily. This will allow your application to be processed faster and more efficiently, minimising any back-and-forth between you and the funder.

Ultimately, be transparent with your finance advisor. Leave no skeletons in the closet. Your finance advisor should have a thorough fact find process which captures all your information. Share all the facts as that allows them to understand your situation and requirements enabling them to establish the best solution for you preventing any unnecessary and unwanted delays or stress. Any broker can get you outline terms from a funder quickly. That is the easy part. Understanding your background, any nuances about the property or structure of the deal; successfully securing the term sheet and proceeding through to completion requires careful preparation from the outset. It is therefore important to be prepared by sending the fact find documents to your finance advisor as far in advance of having an offer accepted as possible. This way, when you need to move quickly, you are already many steps ahead.

A specialist finance adviser that brokers property finance will be able to assist you in collating, preparing, and presenting the relevant information and guide you through each transaction be it a new acquisition or a refinance at a later stage of a deal.

At Merryoaks, our team has vast experience in this area, and we will support you through this process whilst you focus on maximising your business growth, increasing your returns, and making the most of your most valuable commodity, time.

Find out more about how we can help you and schedule a strategy call today.

   Speak to a Funding Specialist

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