This is a question we often get asked by aspiring property developers. Can I apply for finance for a property development before getting planning permission?
There are a few options open to you:
1) Wait for planning permission.
You can wait for planning to come in before applying for finance. But this can sometimes leave you with a chicken and egg situation. You don’t want to invest all that time in plans, and dealing with the council if you won’t get the finance to get off the ground? And if you also need finance to purchase the land or property, you don’t want to delay, as you could lose the opportunity altogether by waiting too long.
2) Apply for finance today, on the assumption that you will get planning
There are lenders who will issue an offer for finance, but include a condition that planning has to be achieved before they release the funds. This can be a beneficial solution, as it provides certainty from the finance perspective – you know that you have finance and what it will cost you – but you haven’t drawn on the loan until the planning comes in. If the worst happens and planning is refused, then you are not straddled with a loan.
3) Apply for finance regardless of planning
There are some lenders who might lend finance on a short-term basis without the need for planning permission. Depending on your circumstances, these could be the right ones for you to work with.
Which route is right for you? That will depend on your circumstances – something which with ASC, we’ll take the time to understand before talking through the different options available to you.
