Alternative lending platform Assetz Capital and sales guarantee provider LDS have jointly launched a funding package for SME homebuilders in England and Wales.
Housing and suburban apartment developers with gross development values of £1.5 mln (€1.7 mln) to £35 mln (€41 mln) can apply for funding of up to 75% of GDV or 95% of project costs.
Besides a sales guarantee for the purchase of completed and unsold homes, LDS is also releasing a 10% cash deposit, allowing developers to spread their equity further, increasing their capacity to build more new homes.
Ben Jenkinson, regional director of LDS Sales Guarantees, said: ‘We are excited to launch this alliance today which combines LDS Sales Guarantees and loans to provide a higher geared finance package with a guaranteed exit. The product will unlock the delivery of hundreds of new homes across England and Wales, and we are pleased to be working with Assetz, a quality lender who shares our passion for supporting SME housebuilders.’
Stuart Law, CEO of Assetz Capital, commented: ‘It is essential for consumers and our housing market that we revitalise SME housebuilding through innovative finance solutions that provide sufficient working capital and de-risk the development process, giving companies confidence to progress with greater certainty of a return on their investment.’
Developers and finance brokers will also benefit from a quick and efficient approval and contracting process and shared due diligence, providing significant cost savings.
Finance brokers will receive loan and sales guarantee procurement fees, and better conversion rates due to the increased funding levels.
Assetz Capital claims that its borrower rates, starting at 7.4%, are amongst the most competitive, while its loan terms of up to 36 months are longer than typically possible in the market.
Earlier this year, Assetz announced it would increase its lending to the SME housebuilding sector by £1bn (€1.2 bn), partly facilitated through its extended partnership with Nordic financing provider Aros Kapital.
