- 24th May 2022
- Posted by: DMM
In this case study, our developer client had found a great development project and needed 100% joint venture finance to secure the opportunity. The subject site was situated in Putney, London and comprised a retail building that had planning consent for nine, new build, residential units of around 6,000sqft.
Project Location: Putney, London
Project GDV: Around £5.400,000
Funding Type: 100% Joint Venture Finance
Facility Period: 18 Months
Exit Route: Sales on Open Market
JV Finance Funding Criteria
- Experienced development and construction team
- Strong local knowledge
- Full planning consent
- Return on GDV of 27% – 30% (before finance costs)
- Facilities up to £10 million
- Total term under 18 months
- 50:50 profit split between funder and developer
Advantages of Joint Venture Funding
The obvious key advantage in JV funding is that a developer need not have any, or much, equity to put into their opportunity. Depending upon the lender, they may not even have to provide a PG. Whilst profit will be split between developer and lender, this funding solution can mean that a developer can take advantage of an opportunity that may otherwise have slipped away.
Developers still must pay for costs up to acquisition, for example achieving planning consent, valuation, etc, but these can be usually recovered from the loan facility. This project is a great example of how a development team and JV lender have partnered to enable the construction of a residential development that is sure to attract a strong interest from buyers.
Are you seeking 100% Joint Venture Finance?
If you have a project for which you require 100% joint venture funding, then contact Developer Money Market to see what options may be available. You can search instantly here using our loan comparison platform and take advantage of our full application support. You can also learn more about raising 100% property development funding via our YouTube Channel here.