In the right circumstances, development finance can be an absolute godsend. But just as is the case with all financial products and services, it’s of crucial importance to know exactly what you are getting yourself into.
So in order to ensure that the your approach to funding your project is as sound as can be, we’ve highlighted five important things to consider before going ahead with your application. If you have any doubts regarding any of the following, be sure to get in touch with a reliable independent broker for more information:
1. Do you really need finance?
First and foremost, it’s always worth considering whether or not you genuinely need finance in the first place. The reason being that if there are alternative solutions available, taking on additional debt may not be the best way to go. Think carefully about what the finance will be used for and what you can expect to get out of it, in order to determine whether or not it makes sense to go ahead.
2. Short term or long term?
Your answer to this question will make a big difference with regard to the loans and financial products that may or may not suit your needs. A bridging loan is short term, yet an ideal quick funding solution. Longer-term, development finance and more conventional mortgage products could get the job done. Be very specific when it comes to how quickly you need the money and how soon you intend to pay it back.
3. How much do you need?
This is of unique importance for two reasons. First of all, asking for too much and being unable to justify your request vastly increases the likelihood of your application being declined. Secondly, asking for too little and finding yourself in need of additional financial assistance further down the line is both inconvenient and indicates a lack of professionalism. So once again, the key lies in being as meticulous and precise as possible when determining exactly how much you need.
4. Do you understand all the associated costs?
Always think carefully as to whether you have fully considered all the associated costs that go hand-in-hand with development finance. You may be able to afford to repay the loan amount, but what about the various arrangement fees, interest rates, commissions and so on? Fees and charges very spectacularly from one lender/broker to the next and are not to be taken for granted.
5. Have you considered all the options available to you?
Last but not least, the market for intelligent or ‘alternative’ financial products and services is larger today than it has ever been. Whatever the funds are to be used for, it’s likely that there are multiple, maybe even dozens of viable avenues to explore. Hence the importance of working with a reliable, reputable and fully independent broker, who can help you explore and consider the most appropriate solutions for your financial needs.
This article was provided by Donkey Finance.