A property developer may seek financial help to aid in the development of their property via property development finance. They are used to secure a loan against any type of property, from commercial or residential properties to semi-commercial properties. Also, with or without planning permission, funding can be received for land.

It’s available for Limited companies, Limited liability partnerships and Individuals. HSBC normally requires the scheme to be placed in a limited company created for the sole development of the site, commonly known as an SPV(special purpose vehicle).

It can be used anywhere in the UK and it’s okay for Non-UK residents to apply for the funding too. There’s no check for income proof and poor/adverse credit is usually fine. The applicant must be over 18. Experienced developers will find it easier to get accepted, but it’s still possible for those with less experience to get accepted, as long as they can demonstrate an ability to tackle the development in a professional manner.

There is a minimum lend amount of £50,000, but there is no upper limit. Most loans average around the £200k-£5m range. A loan can be given for up to 90% of the cost, with interest rates ranging around 5%-12% pa, this depends on the type of project, location, loan amount and the amount of experience of the property developer. HSBC offers low arrangement fees based on the agreed loan, they are usually around 1-2% of the total loan.

The loan is drawn down at set periods in the project as the work is completed, with the percentage taken worked out from HSBC’s surveyor reports. It offers a better alternative to commercial mortgages or buy to let mortgages.

HSBC decides the outcome of an application the same day it is submitted, and if approved, funding is available soon after.

If you’re a property developer and are in need of additional funding, HSBC’s property development finance may be for you.