Builders finance fund
The Builders Finance Fund was created in April 2014 with the aim of assisting smaller housing developers in England. The fund has been extended for housing schemes of between five and 250 homes. A total of £525 million has been set aside to help promote development. The purpose is to assist developments that have temporarily stalled due to financial issues.
The factors that are taken into account to determine eligibility include:
- Projects must be between five and 250 houses.
- The bidder must be within the private-sector.
- For bids of between five and fourteen houses, the bidders must be small and medium enterprises (SMEs).
- Public sector bodies cannot bid in their own right but a private sector partner is eligible.
- Organisations that control land that has been disposed of by the Homes and Communities Agency (HCA) are eligible if a legal agreement is in place.
- A minimum of outline planning permission must be in place for the site.
- The site must have planning consent in place by the 30th June 2015 to allow development to begin.
- The funding will be a development fund to contribute to project costs for delivery of the scheme.
- Funding will be temporary, either as a loan or as a recoverable equity share (capital investment plus a return).
- Adequate security for the investment will be required.
- Investments must be state-aid compliant.
- Funding must be drawn down by 31st March 2017 and must include some draw down in 2015/16.
- A minimum of £200,000 is required.
- Bidders must agree that the project is fundamentally viable, repayment will be possible and that any other existing lenders consent.
- Residential properties within the scheme must be marketed in the UK.
- A robust delivery plan is required.
- If funding has been received from other similar Government programmes, they will not be eligible under the current scheme.
 Application process
The Homes and Communities Agency and the Greater London Authority (GLA) will make decisions on the shortlist and undertake due diligence, contracting and monitoring on proposals.
Following the successful passing of the due diligence stage, the project will achieve formal investment approval and negotiate on the contract terms before investment.
A number of reporting obligations will be detailed within the contract to allow for monitoring of investments.
 Further information
The Department for Communities and Local Government have produced a prospectus with detailed information about the fund.
In October 2015, the BBC reported that of the £525m funding available, just £1m had been allocated, with just 2 projects having received awards. The fund is due to close in 2017.
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