Assetz Capital has partnered with LDS Sales Guarantees to offer development loans with a sales guarantee to small- and medium-sized enterprise (SME) housebuilders.
The peer-to-peer lending platform said the partnership expands its funding solutions for SME housing developers.
The addition of a sales guarantee assures demand for completed homes, Assetz said, while also releasing a 10 per cent cash deposit which allows developers to spread their equity further, increasing their capacity to build more new homes.
The package provides funding of up to 95 per cent of project development costs and a guarantee for the purchase of any unsold completed homes.
Developers with gross development values (GDV) of between £1.5m and £35m can apply for a funding package of up to 75 per cent of GDV or 95 per cent of project costs.
“Historically SMEs have been essential to meeting our national housebuilding targets, but the sector has declined in recent decades because of significant economic challenges and a lack of financial support from traditional sources of capital, like high street institutions or the public sector,” said Stuart Law, chief executive of Assetz Capital.
“Today, we are seeing demand for new homes hitting historic levels, while supply continues to lag a long way behind, driving up prices. It is essential for consumers and our housing market that we revitalise SME housebuilding through innovative finance solutions that provide sufficient working capital and de-risk the development process, giving companies confidence to progress with greater certainty of a return on their investment.
“This is an exciting partnership which provides further evidence of our commitment to supporting SME housebuilding in the UK in collaboration with like-minded partners.”
Ben Jenkinson, regional director of LDS Sales Guarantees, added: “We are excited to launch this alliance today which combines LDS Sales Guarantees and loans to provide a higher geared finance package with a guaranteed exit. The product will unlock the delivery of hundreds of new homes across England and Wales and we are pleased to be working with Assetz, a quality lender who shares our passion for supporting SME housebuilders.”
At the start of this year, Assetz Capital announced its aim to increase its lending to the SME housebuilding sector to £1bn, partly facilitated through its extended partnership with Nordic financing provider Aros Kapital.
Last week, the platform named Andrew Charnley as managing director to take charge of the lending side of the business and help it hit its targets.