How much profit does a developer retain?
For a 100% funded loan package a developer will usually retain around 60% of the net development profit.
Is the cost of the mezzanine finance fixed?
The fee structure is fixed. The only variable is the interest cost which is dependent on the actual cashflow timings of the scheme.
Will this affect my existing banking relationship?
No. The mezzanine loan is provided alongside senior debt loans and so is complementary to existing banking relationships, not a replacement.
Will the process create additional work for me?
No. Blue Sky and the bank work closely together during the whole process from approval to drawdown, and ultimate repayment of the loans. There is no duplication of information required.
Do I need to form a new company?
Yes. We ask you to form a newco to undertake each specific development. The purpose of this is simply to ring-fence the security and funding arrangements so there is no impact on your existing banking relationships or funding lines.
What security is required from the SPV formed to undertake the development?