Alternative lender Invest and Fund has announced a seven-year partnership with Homes England to increase the amount of finance available to small- and medium-sized enterprise (SME) developers.
The partnership will create a £25m revolving fund which will be used to provide constriction loans of between £400,000 and £2.5m, at up to 80 per cent loan-to-cost.
This funding will be available exclusively to SME property developers working on housing projects which will include at least two new homes.
“We are delighted to be partnering with Homes England to help fund the development of the new homes the country needs,” said David Turner, chief executive, Invest & Fund.
“Our approach of employing a best in class credit underwriting model, backed by a strong focus on operational excellence and our culture of good governance has been recognised in this partnership and we are focused on lending to creditworthy borrowers via this venture.”
Gordon More, chief investment officer of Homes England said that it chose to partner with Invest & Fund due to their “shared purpose to support the market and the desire and capability to scale their lending activity”.
“The deal demonstrates our ability to Make Homes Happen in different ways in support of our mission,” added More. “We are particularly pleased to be working with a specialist finance provider, recognising the crucial role that the non-Bank lending market continues to play in supporting smaller builders in these challenging times.”
Housing minister Christopher Pincher MP said: “Building the homes the country needs is key to our economic recovery and is a top priority for this government.
“We are determined to support as many as possible within the house-building industry, in particular, smaller builders – to get Britain building.
“I welcome the announcement of the partnership between Homes England and Invest & Fund – which will not only support our commitment to build more homes, but also give smaller developers easier access to finance, helping them to flourish.”