{"id":729,"date":"2021-12-16T12:52:49","date_gmt":"2021-12-16T12:52:49","guid":{"rendered":"https:\/\/mackenziebyrne.co.uk\/?p=729"},"modified":"2022-02-23T10:33:53","modified_gmt":"2022-02-23T10:33:53","slug":"how-to-get-development-finance-and-cover-100-of-your-costs","status":"publish","type":"post","link":"https:\/\/mackenziebyrne.co.uk\/?p=729","title":{"rendered":"How to Get Development Finance and Cover 100% of Your Costs"},"content":{"rendered":"

Have you ever missed out on a really great opportunity because all your capital was tied up elsewhere?<\/p>\n

If you have, you\u2019re not the only one. This is a common problem for SME developers. Luckily, there\u2019s a solution: getting finance that covers 100% of your development costs.<\/p>\n

Everyone knows that equity is difficult to come by. Given this, you might ask whether 100% finance is actually available. If equity is hard to get at the best of times, how are you meant to get it when you can\u2019t demonstrate to investors that you have skin in the game<\/a>?<\/p>\n

The short answer to this question is: yes, 100% finance is definitely available. At Mackenzie Byrne, we regularly and consistently source 100% finance for developers<\/a>.<\/p>\n

Here\u2019s what you need to do to get 100% finance for your development project.<\/p>\n

Show funders who you are<\/strong><\/p>\n

When you ask a funder to invest in a project to which you\u2019re not committing your own capital, you\u2019re asking them to take on more risk than usual. To counteract this extra risk, you need to be able to show funders that they can have confidence in you. There are 4 ways to do this:<\/p>\n

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  1. Demonstrate your experience<\/strong>. Your experience as a developer is vital to the success of your finance application. Show funders you understand the industry and know what you\u2019re doing. If you haven\u2019t yet acted as a principal and completed development projects, don\u2019t worry \u2013 you can also cite experience gained in employment (e.g. as a project manager)<\/li>\n
  2. Lay out your track record<\/strong>. You need to be able to show funders that you have successfully completed similar projects in the past (again, this can be as a developer or as an employee\/contractor)<\/li>\n
  3. Explain why you don\u2019t have capital available<\/strong>. You don\u2019t have to come up with complicated reasons for this. Simply explain that all your capital is tied up in other projects, or that you\u2019re just starting out and haven\u2019t accumulated any capital yet<\/li>\n
  4. Produce a Net Asset Statement<\/strong> You may not need capital to get 100% finance, but funders will want to see that you have a strong enough Net Asset Statement to satisfy a personal guarantee<\/li>\n<\/ol>\n

    When you\u2019re able to demonstrate your experience and track record, explain why you don\u2019t have available capital, and produce a strong Net Asset Statement, you\u2019ll almost be ready to approach funders with a finance application. But first, you\u2019ll need to prepare yourself for what funders may require from you.<\/p>\n

    Anticipate funders\u2019 requirements<\/strong><\/p>\n

    Typically, development finance is made up of two components: senior debt and equity. If you\u2019re unfamiliar with these terms, check out our blog on understanding the capital stack<\/a>. A basic funding model might look like this:<\/p>\n