How to prepare a loan request in 3 easy steps

We know what it’s like to be a property developer – a lot of us here at Blend Network have been there and done that. We know how hard and time consuming it can be to get finance for your projects. And when it comes to getting finance, the entire process often depends on how well-presented – or not – the loan request is by the borrower to the lender. Most lenders will want to see experience, and a well-presented loan request can make or break a deal because it will send a clear indication to the lender of whether the borrower is experienced and sophisticated enough to drive value throughout the project and achieve the gross development value.

That’s why we thought it would be helpful if we prepared for you a lender’s guide to preparing the ideal loan request. What you’ll find below is a simple process that tells you the information that you need to provide to any potential lender. That’s what we at Blend Network would require when you approach us to get funding, but it’s also what other lenders would need from you. So, tune in…

As a first step, any lender will need you to send them three things:

1. An address for the project
2. A brief description of the project
3. An appraisal

The first thing you’ll need to provide to the lender is an address for the project which will enable them to do a quick comparable analysis and understand the micro-location of the site. If, for example, your project is to build a luxury home in a low-income area then that will be a red flag to the lender because they will be concerned about the liquidity of your exit strategy. If, on the contrary, your project is to build 5 x 2-bedroom flats in an area popular with professionals and lack of housing, then that will reflect a liquid market which lender will help get lenders comfortable with the project.

The second thing you’ll need to provide to the lender is a brief project description of your project. This could be for example:

• Convert a 3-bed house into a 6-bed HMO
• PD conversion of office into 8 x 2-bed flats
• 4 x new-build houses

Last, but certainly not least, you’ll need to provide an appraisal. Your appraisal will need to include the following high-level information:
• Purchase price / Current value
• Purchase costs (legal, SDLT, etc…)
• Build cost
• Professional fees (architect, M&E, etc…)
• Additional costs (CIL, S106, NHBC, etc…)
• Schedule of accommodation / GDV

We hope that this quick guide is useful. If you have any project that you are looking to fund, send us an email now to enquiries@blendnetwork.com or pick up the phone and call us on 020 3409 3300 and speak with a member of our origination team. You’ll be always speaking with a decision-maker who’ll be able to tell you straight away whether we can fund your project, and if so, we will send you terms on the same day!

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