Deferred Consideration

Development finance with deferred consideration allows a developer to pay for the land at a later date. It could be the solution you need to unlock a difficult property purchase.

How does it work? The vendor could agree to defer the payment of the purchase price - this could be either deferring all of the purchase price until the site is finished or the developer paying part of the purchase price on completion and deferring the balance of the purchase price to a later date.

If the vendor agrees: our lenders will have the first charge on the land and the vendor will take a second-ranking legal charge to retain an interest in the land. We will then use the development value of the site as security to lend the funds to the developer. Once the development is complete, it is sold or refinanced to repay the loan and to pay the deferred consideration to the vendor.

If you would like to know more information, please get in touch with the RFL Team.

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