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January 29, 2010
Developers Seek To Raise Cash From The Wealthy
Property developers struggling to obtain financing from private banks and high street lenders are turning to wealthy individuals for loans, according to estate agent Knight Frank.
Rich UK-based individuals are providing short term mezzanine and bridging finance for property developers by clubbing together, individually providing loans or investing in specialist funds, according to Knight Frank’s mortgage lending arm.
Individuals are putting between £500,000 and £2m behind cash-strapped property developers, on a 12 or 24 month repayment basis. Individuals are looking for an annual return on their capital of between 15% and 30% , charged monthly like a credit card, and arrangement fees of between 1% and 2.5%.