Build it
Build it
Development finance
Ground-up, conversion and part-built schemes, from site purchase to exit.
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Development finance
Which cap binds, loan to cost or loan to GDV, and the real day-one equity.
Build to Rent development
Underwritten on stabilised yield and DSCR, not sales rate.
Mezzanine and stretched senior
The gap between senior LTC and what you can fund, and the true blended cost.
Heavy refurbishment and conversion
Where refurbishment stops being a bridge: structure, change of use, drawdowns.
Part-built and rescue finance
Valuing an unfinished asset when the contractor has gone.
Bridge it
Bridge it
Bridging finance
Short-term debt where the deadline, the asset or the exit will not wait.
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Purchase bridge
Completing before the money is in place: chain breaks, tight deadlines, unmortgageable stock.
Development exit finance
Off development debt at a lower rate, to buy sales time and release equity.
Auction finance
A 28-day clock, and what must be in place before the hammer falls.
Pre-planning and planning gain
Lending against current value with planning upside.
Below market value purchase
Day-one lending against open market value rather than price.
Second charge and capital raising
Raising against existing assets, and first-charge consent.
Light refurbishment finance
Bridge plus refurb tranche, and where the development boundary sits.
Also structuredBridge to let and refinance
Hold it
Hold it
Mortgages and term finance
Long-term debt against income, once the asset is built, let or trading.
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Buy to let mortgages
ICR stress testing, limited company against personal, portfolio rules.
HMO mortgages
A higher cover test, licensing, and the two valuations a lender takes the lower of.
Commercial term, investment
Tenant covenant and lease term, and why DSCR sets the loan.
Commercial term, owner-occupier
Trading accounts and EBITDA rather than rent roll.
Portfolio refinance
Cross-collateralisation, and one facility against individual loans.
Stabilisation and term refinance
The income test replacing the GDV test, and the letting void before term debt engages.
Co-living and PBSA
An operational asset valued on income, and the operator covenant.
Run it
Run it
Business finance
Funding the business behind the property, secured on the ledger, the equipment or the covenant.
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How we work
Case studies
Articles
Tools
Development finance calculator
Size the facility against site cost, build cost and GDV.
Development exit calculator
Refinance the development facility and release equity at PC.
Bridging finance calculator
What a bridge costs, and what actually clears on day one.
Refurbishment finance calculator
Fund the purchase and 100% of the works, with interest rolled to exit.
BTL rental cover calculator
The rent a buy to let must achieve to clear a lender's cover test.
Commercial mortgage calculator
What a commercial property's income will support, and what it costs.
About
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Hold it › Stabilisation and term refinance
A completed scheme held for income changes the question a lender is asking. Through the build it was gross development value against cost. Once it is finished and being let, it is the rent against the debt, and those are two entirely different tests that a scheme can pass and fail in either order.
Between the two sits a gap nobody budgets for properly. The building is complete and carrying full debt, but it is not yet let, and most term lenders will not engage until occupancy reaches a level they are comfortable with, commonly around 90%. The scheme is at its most expensive precisely when it produces least.
Coverage is what governs the eventual facility. Debt service coverage of around 1.3 to 1.5 times is a common requirement, calculated on net income after operating costs rather than gross rent. A scheme sized on gross rent is sized wrong.
Check the rent clears the term lender's cover test before you get there.
A stabilisation loan where the timing does not line up
Where the development facility expires before the scheme is let, a stabilisation loan repays it and carries the building through the letting period. It is sized on the completed building rather than its rent, and is usually far cheaper than an extension negotiated late or a forced sale of units.
The stabilisation period funded, not absorbed
The months between practical completion and stabilised occupancy have a cost. It belongs in the facility from the outset rather than being met out of working capital at the worst possible moment.
The term lender's test applied early
We run the coverage calculation the exit lender will use, on net income at a stressed rate, while there is still time to change the letting strategy or the specification.
A letting strategy the lender recognises
Agent, target rents, incentives and expected absorption. Occupancy is the trigger for the refinance, so how quickly it is reached is a financing question as much as a marketing one.
Which lenders play here
Term lenders across the investment market for the eventual facility, and bridging or specialist lenders for the stabilisation loan. Appetite depends heavily on asset type and on how close to stabilised the scheme is, so the sequencing of conversations matters more here than in most products.
1.3-1.5x
Typical cover on net rent
25-35%
Gross rent to running costs
90%
Occupancy term lenders want
Net
Income basis, after costs
Indicative, and not an offer. What a lender will actually do depends on the scheme, the borrower and a full valuation.
What to have ready
Bring these and we can tell you where you stand.
Each one is something a lender will ask for. Having it early is the difference between a fast answer and a slow one.
✓The completed scheme: units, specification and practical completion date
✓The existing facility: balance, expiry, and any extension already used
✓Achieved rents and lettings to date, with the agent's absorption view
✓Operating costs: management, voids, service charge, maintenance
✓A current valuation on an investment basis, not a residual one
✓Your intention: hold for income, sell once stabilised, or decide later
Next
Related in this pillar.
Common questions
The questions this product raises.
What is a stabilisation loan?
A short-term loan that repays the development facility once the scheme is built, then carries it while it lets. It is sized on the completed building rather than on its rent, so it does not need the occupancy a term lender asks for. Once the building is let and the income is proven, it is refinanced onto term debt or the scheme is sold.
How is a stabilisation loan different from a development exit loan?
Mostly in what comes next. A development exit loan buys time to sell units. A stabilisation loan buys time to let them, and the lender wants to see a route to a term refinance rather than a sales plan. Some schemes need both, selling some units and holding the rest.
When will a term lender take over from the stabilisation loan?
Once the scheme is let, not once it is built. Many term lenders want occupancy of around 90% before they engage, and they test rent against debt rather than value against cost. The stabilisation loan carries the scheme until it passes that test.
When should a stabilisation loan be arranged?
Well before the development facility runs out, and ideally at the outset. Arranged while the development loan still has time on it, against a letting plan a lender can follow, it is usually far cheaper than an extension negotiated late or a forced sale of units.
Bring us the detail.
Send what you have. We will tell you what is fundable and what needs work before anyone approaches a lender.
Specialist property finance for developers who want the numbers to survive underwriting.
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Fundingwise Limited is not authorised or regulated by the Financial Conduct Authority, and arranges unregulated finance only. That means lending secured against commercial property, or against residential property that is not, and will not be, occupied by the borrower or an immediate family member as a main residence. We do not advise on or arrange regulated mortgage contracts or regulated bridging loans. Because this finance is unregulated, FCA conduct rules and access to the Financial Ombudsman Service do not apply. Fundingwise Limited is registered in England and Wales, company number 13750788.