Finance Facilities

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A senior loan is a debt obligation issued by a single financial institution to a developer or investor. This type of loan grants the lender a first charge above all other debt obligations of the borrower, making senior debt the first to be repaid. Senior loans typically offer leverage up to 60% of the loan's value.

Traditional lenders usually provide 50%-60% loan-to-value (LTV) as senior loans. However, real estate developers and investors often need to source 40%-50% of the required funds themselves, creating challenges that frequently hinder deals due to a lack of adequate property finance.

Borrowers must carefully plan their loans from the outset to suit their needs.

Accepting a senior loan from one institution may limit their ability to secure

additional loans from others. Sometimes, the senior lender will not permit a junior lender, or disputes between lenders can arise, 

preventing the borrower from realising their project.

Property experts, such as developers or investors, must understand their options for securing senior property finance while covering the remaining funding requirements. They need to explore how to leverage senior loan conditions effectively without jeopardising the deal. Borrowers must also ensure that all lenders agree on terms andhave experience working together, particularly when multiple loans are involved.

At Property Finance Partners, we understand these complexities. We structure tailoredsolutions to help our clients secure the most advantageous senior loan terms while integrating additional finance to ensure project realisation.

Stretch senior finance is a single-lender loan offering higher leverage, often up to 85% of a loan’s value. It combines the benefits of a senior loan (up to 60% LTV) and a mezzanine loan (60%-85% LTV). In some cases, lenders can offer financing up to 90% of costs, or even 100% through additional structures.

This type of loan is suitable for development, investment, refurbishment, or mixed-use projects, including residential, commercial, hotels, student accommodation, and PRS schemes.

Example:

A developer needs £5,000,000 for a residential project with a gross development value (GDV) of £6,400,000, encompassing purchase and development costs of £5,000,000. A stretch senior loan could provide up to £4,500,000, making it more competitive than two separate loans from different lenders. For higher leverage beyond 90% LTC, additional financing options, such as preferred equity, may be available.

We assist clients by providing tailored solutions, securing the best stretch senior loans, and establishing long-term strategic finance partnerships.

Private equity investments are typically provided by HNWIs or private equity funds. These funds raise capital from institutions such as pension funds, insurance companies, and collective investment schemes. Preferred equity finance can offer up to 100% of total costs without requiring inter-creditor agreements, making it a valuable tool for maximising leverage.

Example:

A developer with a project costing £9,000,000 secures £5,600,000 in senior loans and £2,050,000 in mezzanine loans, leaving a gap of £1,350,000. Property Finance Partners can arrange preferred equity financing to bridge this gap, offering a flexible and profitable solution.

We match clients with equity funds and lenders whose strategies align with their project goals, often offering multiple exit options such as buyouts or portfolio management.

A joint venture allows developers to partner with investors to fund projects they cannot finance alone. Potential partners include equity funds, real estate funds, corporate or private investors, and landlords.

Examples:

1.  A developer contributing 5% of project costs for a £3,200,000 GDV project partners with an investment firm to secure the remaining funds.
2. A developer with no equity for a £38,200,000 GDV project partners with a real estate investment group to cover the entire £28,500,000 project cost.
3. A developer pursuing a £59,000,000 GDV PRS project partners with a real. estate fund offering full financing and long-term portfolio management.

Property Finance Partners tailors JV structures to meet the unique needs of

developers, ensuring project realisation and future opportunities.

A bridging loan is a fast and flexible funding solution designed to "bridge the gap" cash flow, enabling individuals and businesses to secure deals or complete projects. These loans are typically short-term (12–18 months) and secured against assets, making them a popular choice 

for property developers and investors.

Key Features:

• Speed & Flexibility: Quick access to funds, ideal for time-sensitive transactions.
• Versatile Applications: Suitable for various property deals, including auctions, refurbishments, conversions, buy-to-let investments, and new developments.

Example Use Cases:

1. Conversion Project: A developer required funds to convert a property into three flats but couldn’t secure a traditional loan due to an existing first charge. A bridging loan with a second charge was tailored to cover the shortfall, enabling project completion. The developer planned to refinance with a buy-to-let mortgage post-project.
2. Off-Market Deal: A real estate company needed immediate funding to secure an office building purchase. A bridging loan allowed them to complete the transaction within the necessary timeframe, safeguarding their deposit.
3. Auction Purchase: A property investor required £570,000 to complete an auction purchase within three weeks. A bridging loan facilitated the transaction within nine days, allowing the investor to meet the deadline.

Pro Tip: 

Planning ahead is crucial. At Property Finance Partners, we help clients

secure indicative terms from lenders before auctions, providing confidence and acompetitive edge.

Property development finance is tailored to fund real estate projects, including new builds, conversions, and renovations. It is typically secured with a first legal charge on the property and structured based on the 

Gross Development Value (GDV).

Key Features:

•  Flexible Staging: Funds are released in stages (monthly or quarterly) as the project progresses.
• Short-Term Focus: Terms typically range from 12–36 months.
• Diverse Applications: Supports residential, commercial, mixed-use projects, PRS (Private Rented Sector), PD (Permitted Development Rights), and more.

Advantages:

• High Loan-to-Value (LTV): Secures up to 100% of construction costs.
• Broad Asset Coverage: Includes derelict or unconventional properties.
• Cost Efficiency: Interest is charged only on drawn funds.

Example Use Cases:

1. Holiday Apartments: A developer secured funding for a holiday apartment project despite lender hesitancy in this segment.
2. PD Rights Conversion: A developer converted offices into residential flats using a JV partner to fully fund the project.
3. PRS Development: A project with 50% units for sale and 50% as PRS was funded through a combined development and investment finance approach.

Buy-to-let finance is tailored for property investors purchasing real estate to rent out. These loans are interest-only, with repayment of the principal at the end of the term.

Buy-to-Let (BTL) Finance

Buy-to-let finance is tailored for property investors purchasing real estate to rent out.

These loans are interest-only, with repayment of the principal at the end of the term.

Key Features:

• LTV Options: Up to 75% LTV with traditional lenders; higher LTVs with alternative lenders.
• Interest-Only Structure: Reduces monthly payments.
• Rental Income Focus: Loan eligibility depends on property value and net rental income.

Example Use Case:

 A property group with a £70M portfolio (64% LTV) restructured its finances through Property Finance Partners. 

This increased their LTV to 85%, unlocking equity for new acquisitions.

For developers seeking funding without tying up personal capital, JV partnerships canprovide a strategic solution. These partnerships involve investors or real estate funds contributing to project costs in exchange for a share of profits.

Example Use Case: A developer secured £2.375M from a JV partner to fund a £3.2M residential project with only a 5% contribution (£125,000) on their part.