Loan against Plot

In the development of a site, a creditor may finance the proposal only if it has valued the site used as collateral and considers it a sustainable use. A further possibility would be the acquisition of the plot with a bridge loan and the use of available resources for the construction work.

When we asked the specialists what the distinction was between providing financing for real estate in cases that had a building permit or not. Unless the country has a building permit, the bridge loan provider is very likely to cut LTV lending, although more can be made available if additional collateral can be provided.

Commenting on the decision, Terry Markham, Funding Operation Director, said: "We must all bear in mind that every day country is provided as collateral to all creditors. "Some creditors, however, have an appetizer for landholdings, but the overwhelming majority of them will only loan on fully planned plots, as this increases the resaleability of collateral in the event of failure.

While Montello is able to grant loans against empty property, it will only do so against property that has a building permit, according to Christian Faes, Montello's CEO. "As a rule, we are not a promotional loan provider, but if the transactions make business as usual, then we are not against granting credit against real estate if the transactions makes business sense," he added.

It was also asked whether the criterion or procedure for plots would change if a different type of use were suggested in the building permit. Ian Rennie confirmed this when he spoke about different criterions for the different suggested uses of land: It is good to obtain all information or samples about the clients' experiences to date with real estate developments for developing transactions on the plot with plan.

Clearly, the granting of a building permit is essential to ensure interim financing onshore. A lot of creditors we have talked to have said that this part of the business is driven by a few specialist companies and that they themselves are currently looking to design and sell this in their own organizations.