No Personal Guarantee (PG) development loans are effectively a form of unsecured funding for major property development and construction projects. An attractive option for developers unable or unwilling to use their own personal assets as security, No Personal Guarantee development finance can be a flexible and affordable short-term facility.
But as No Personal Guarantee development finance can be more expensive than traditional development finance, experienced broker support is essential. Negotiating on your behalf, your broker will help present your case as convincingly as possible to ensure you get an unbeatable deal.
At UK Property Finance, we help new and established developers from all backgrounds secure competitive No Personal Guarantee development finance deals at up to 90% Loan to Costs and 70% GDV.
Whatever your reasons for seeking unsecured funding for a property development project, we can pair you with the perfect lender for your requirements. Call anytime for an obligation-free consultation, or email the team at UK Property Finance and we will get back to you as soon as possible.
Operating as a fully independent broker, we are able to provide the honest and impartial advice you need to make the right decision. We use our extensive industry knowledge and experience to streamline and simplify all aspects of the application process for the benefit of our clients.
Working with UK Property Finance, your case manager will help you prepare all of the documentation and paperwork needed to support your application. Every NPG development finance product we arrange is bespoke and tailored to meet the exact requirements and budgets of our clients.
We will also discuss any alternative funding options that may be available for your project, should a No Personal Guarantee development loan not be suitable for your requirements.
When looking for development finance it is important to identify the type of project being planned by the developer in order to access the correct funding product. Types of works can include:
New builds nearly always require development finance loans. Once the project is completed, developers may use development exit finance as a more cost effective solution, but this cannot be done before the project is watertight.
for this type of project refurbishment finance is typically the correct type of loan to use, however if the project is larger than the norm, development finance may be a better alternative.
a refurbishment loan, which is a type of bridging finance, is generally used for property renovations. It can be used for various improvements including, installing a new roof, general structural changes, building an extension, refurbishment, and decoration.
Property investors or developers may want to buy property which needs development or completion work still doing and are unable to get funding from their bank. This is a typical scenario when a bridging loan is a suitable alternative.
Development finance loans are typically paid in one of the following three ways:
the total loan amount is paid in full, using the profits, when the project is complete, and the properties have been sold.
this usually happens when the developer wants to keep the development for either personal use or for rental purposes.
this type of short term loan is often used to fund a new development project before the current project is sold. It can also be used to give developers a bit of breathing space to complete minor works and find buyers.
Where a personal guarantee is issued, a borrower assumes the legal obligation to ensure outstanding debts are repaid. This means that if the business is unable to repay the debt as promised, responsibility falls with the individual and their own personal assets.
No - loans issued on the basis of a personal guarantee are considered unsecured loans. This is because the loan is not issued on the basis of one or more specific assets of value.
As with an unsecured loan, defaulting on a personal guarantee loan may result in debt collection measures being enforced against the individual who provided the guarantee. At which point, their assets may be repossessed and sold to cover the costs of the debt.
Lending policies differ significantly from one provider to the next, including maximum loan amounts. Typically, a No Personal Guarantee development loan will be issued to a maximum of 90% Loan to Costs and 70% GDV.
This can make No Personal Guarantee development finance a useful facility for investors and developers looking to minimise their own capital investment, while not having to worry about that prospect of their own personal assets being repossessed.
Having access to funds for property development purposes allows borrowers to take on bigger projects than they would usually be in a position to finance.
The purpose of the facility is to provide the developer with additional time to sell their completed development, while keeping costs as low as possible.
Qualifying for finance as a first-time developer can be challenging. This is why it is advised to seek support of an independent broker at the earliest stage.
Our products are suitable for large and small hotel development projects of all types, from repurposing existing properties to building new hotels from scratch.
Joint venture development finance works in a similar way to conventional development finance. However, no deposit needs to be paid and rates are typically higher.
Mezzanine finance, aka mezzanine funding, effectively enables property developers to 'top up' their first-charge development finance facility to access extra funding.
No Personal Guarantee (PG) development loans are effectively a form of unsecured funding for major property development and construction projects.
Whether your goal is to maximise the value of a property you plan to sell or to boost rental income long-term, a refurbishment finance loan could be just the thing.
Senior debt development finance is the primary source of funds in the form of a first-charge loan. It is considered a lower-risk facility on the part of the lender.
Stretched development finance can be the perfect choice for investors and developers looking to stretch their own equity as far as possible with borrowing for up to 90%.
'Light refurbishment' is used for cosmetic upgrades and minor improvements. 'Heavy refurbishment' is used to raise funds for structural improvements.
Commercial property development finance can be used to fund, build or develop a property or be used to expand your current business property or space.