Are you a developer and need financing for a construction, a rehabilitation or an investment? Get it with a developer loan . In addition, if you have difficulties with traditional banking, we also explain the benefits of getting a developer loan with private capital .
At Dark Keep we are leaders in private equity loans and we have a special dedicated service for promoters. More information can be found in this post or in the section on loans for investments and real estate promotions .
What is a developer loan?
A developer loan is a type of financing aimed at real estate developers who need financing to start or finish a real estate development and thus ensure that they can meet the construction deadlines.
There are two types of sources to get it, bank financing and private financing . Later, we will show the main benefits of each font.
A few years ago, the requirements to access a bank promoter loan were simpler because banks were more flexible in granting financing. Currently, as banks have tightened the conditions for granting loans to developers and do not grant financing in the first steps, private financing with their private capital has gained more prominence.
So, if a bank denies financing to a developer to start a new project or has stopped construction due to lack of liquidity, the necessary financing will be obtained with private capital to unblock the situation and with better payment conditions, with exclusive shortcomings for promoters , than with traditional banking.
Difference between bank and private financing
As we have commented previously, currently, traditional financial entities only issue loans to the developer that have an immaculate balance and that can contribute between 30 or 40% of their own resources. Under these conditions, promoters cannot find 100% financing of a viable project and limits the movements of small and medium-sized companies.
With this scenario, an alternative financing appears, which is all that does not come from the bank. In it we find private financing, private equity or loans with a mortgage guarantee. Thanks to these financing vehicles, there are many residential projects that have been unlocked before the low waist of the bank, presenting themselves as a great solution to financing problems.
To know the main advantages and disadvantages between bank and private financing for developers quickly, you can consult this table that we have made expressly for the occasion:
|Bank financing||Private financing|
Better interest rates
· Facility of guarantees for customer reservations
Possibility of unlocking financially stagnant situations
Longer grace period
Agility with the granting of credit
More flexibility with payment
Stricter conditions to access credit
The vast majority require monitoring of the work
Strict with certifications
In which cases is it necessary to apply for a private equity developer loan?
Generally, all professionals in the construction sector need private equity financing in one of these cases:
- When they want to start a new viable project and do not have the initial financing.
- They want to finish a construction started and that the work is paralyzed due to lack of liquidity.
- The bank denies them all kinds of financing.
- They need liquidity urgently and quickly to face a payment that cannot wait.
In any of these cases, private equity can help by making a developer loan to unblock and solve the situation. Thanks to this service, the developer will be able to have the necessary liquidity in each phase of construction.
Advantages of the developer loan with private capital
Carrying out a developer loan with a private equity finance company has a number of advantages that cannot be achieved with a bank:
- All the necessary liquidity will be obtained throughout the construction period; ensuring that the work is not stopped at any time . All capital will be progressively disposed of through work certifications until completion.
- Vesting conditions that the bank can not perform because, in many cases, no fee until not finished the construction and sale of real estate will be paid.
- Accompaniment, advice and financial monitoring throughout the project of the work; from the beginning of the project to the final sale.
- There is a personalized financing project adapted to the characteristics of each construction.
Thanks to all these advantages of the developer loan with private capital, it is possible to finish any project with complete safety and to make the sale of the homes as easy as possible, without them being devalued at any time.
Characteristics of private financing for developers
As is well known, with private capital it is necessary to provide a mortgage guarantee . In the case of a developer loan, this guarantee can be the lot or some property that is outside the development itself. In some cases, it may also be possible to obtain financing through a partnership , but this solution will be discussed in a meeting. There are many good solutions to meet any financial need.
Although the mortgage guarantee is in general an indispensable condition of private capital , it is always better to contact the private capital finance company because in this type of project, there are many cases to decipher and a lot of information to analyze. On many occasions, you can unravel or improve a financial situation simply by consulting and looking for a joint solution.
For this reason, it is very important to contact financial experts who have experience in the sector and in this type of operation, such as Dark Keep. In this way, the promoter ensures that financing is obtained quickly, with the best conditions and without problems or surprises of any kind.
Procedure to get a developer loan
After reading the article, if you want to access a developer loan , the procedure is very simple:
- Contact Dark Keep through our form or by calling us at the nearest Dark Keep office. An agent of ours will get in touch with you very quickly.
- Our team of financial experts and lawyers will carry out an analysis of the operation and we will give a response in less than 48 hours.
- We look out for you, we will look for a private and banking solution , don't worry.
- If the operation advances, we will make a financing proposal with a customized installment plan, with the necessary grace periods if appropriate.
- And now you can move on with your project!