CrowdProperty, a real estate investment platform, says it has launched a new product that will help developers gain greater financial flexibility. The “accelerated funding solution” or REAL (Residential Expertise Accelerating Lending) seeks to help developers overcome the challenge of slow and complex property development finance processes.
REAL will eliminate retained interest and will provide a “streamlined application process.”
Powered by BUILD, CrowdProperty’s in-house proprietary appraisal tool, REAL is said to also enable liquidity and financial efficiency. Decisions and loans of up to £500,000 (£750,000 in London) for bridging and light refurbishment projects typically happen within 4-6 weeks.
Damon Walford, Chief Commercial Officer at CrowdProperty, noted that developers have been hampered by complex processes and slow funding timelines which can harm projects, especially smaller ones.
“We’ve combined our specialist industry experience with a decade of data from over 15,000 funding applications, to help developers access streamlined decisions and finance. By rolling up interest instead of retaining it, REAL enables developers to optimise cash flow and focus on successful project execution.”
The product may be used for bridging finance to complete outstanding work and light refurbishment, including flips.
For bridging loans, the total repair and development budget must be less than or equal to 10% of the CMV (purchase and refinance) and purchase price (if purchased).
For very small projects, the total repair and development budget can be up to 50% of the CMV.
Walford adds that historically, it can take up to 10 months for a developer to receive a green light for their plans, but by using REAL, the timeline is shortened, which can help keep projects going.
“CrowdProperty offers fast funding for auction purchases through a trusted partner, with preferential rates versus applying direct. In combination, these new offerings plug the gaps in traditional finance and meet the needs of smaller developers.”