Joint Ventures

Commercial

Joint Ventures

This method of funding is really geared for a developer who has a great project but lacks the funds to purchase or develop and is struggling with the more traditional development funding.

With access to investors/lender partners who will consider a 100% funding of the right project outs us in a unique position. The idea behind this style of lending is the investor/lender partner put up 100% of the purchase and development and takes a profit share, which is determined by the lenders assessment of risk, amongst other things. Interest will also be charged on the monies utilised.

To show commitment the investor will generally ask the developer to cover all up-front costs including the planning consent [if required] and professional reports, though these can usually be charged back to the scheme.

The investor will require the developer to be experienced and able to demonstrate their success via previously delivered schemes.

How do Joint Ventures work

Simply put as the investor is putting all the cash in they are taking all the financial risk. generally you will find they will use a Special Purpose Vehicle (SPV) which the project will sit in and they will certainly be the majority shareholder, with often both the JV investor and the developer being Directors of that company.

A specialist solicitor will create a Joint Venture contract between both parties, which would outline the role each party plays, and usually that points out that the JV partner puts the cash in for a specific return, and the developer completes the project on time and within budget.

Joint ventures do not have any specific criteria or lending requirements. They are dealt with on a case by case basis and we always see terms and percentage share splits are different from project to project.

if you think this style of lending may be something of interest or you would like to discuss your project with one our specialist brokers then please get in touch and we can see what options you have available to you.


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