help with a college project please


C

Chickenbomb

hi,

I am currently studying for a BSc in Quantity Surveying and Commercial
Management, within one of the assessments i have to do a "Development
Appraisal" for a speculative housing estate, with a value of circa £6
million.

Within the appraisal, i have to quantify as many costs incurred within the
building process, this is easily available, the area in which i am having
difficulty, finding any information on is the cost of having a business
overdraft of between 100k and 500k (these values are so wide ranging because
of professional fees) and a commercial loan, or mortgage of circa £1million
to purchase the land.

The timeframe in which i have to complete the speculative housing
development is 22 months.

So the point of the post is to see if there is anyone on this board, which
can give me some advice (preferably with a www) as to what is a adequate
rate of interest for the overdraft, and how much a commercial loan of
£1million will cost.

from my dealings with a couple of banks (Barclays and Halifax), they seem
very unhelpful, due to

1 Business managers are busy doing business accounts (Halifax)

2 Each accounts rate is dependant on personal factors, and as such they
can not give me any guideline as to what is a reasonable % to allow.

i have not tried google, as the impression i got from the banks is that this
information is not readily available.


any help would be very very much appreciated


thank you for reading my post


John Curley

e- mail address jp (dot) curley (at) ntlworld (dot) com
 
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M

Martin

Chickenbomb said:
hi,

I am currently studying for a BSc in Quantity Surveying and Commercial
Management, within one of the assessments i have to do a "Development
Appraisal" for a speculative housing estate, with a value of circa £6
million.

Within the appraisal, i have to quantify as many costs incurred within the
building process, this is easily available, the area in which i am having
difficulty, finding any information on is the cost of having a business
overdraft of between 100k and 500k (these values are so wide ranging because
of professional fees) and a commercial loan, or mortgage of circa £1million
to purchase the land.

The timeframe in which i have to complete the speculative housing
development is 22 months.

So the point of the post is to see if there is anyone on this board, which
can give me some advice (preferably with a www) as to what is a adequate
rate of interest for the overdraft, and how much a commercial loan of
£1million will cost.

from my dealings with a couple of banks (Barclays and Halifax), they seem
very unhelpful, due to

1 Business managers are busy doing business accounts (Halifax)

2 Each accounts rate is dependant on personal factors, and as such they
can not give me any guideline as to what is a reasonable % to allow.

i have not tried google, as the impression i got from the banks is that this
information is not readily available.


any help would be very very much appreciated


thank you for reading my post


John Curley

e- mail address jp (dot) curley (at) ntlworld (dot) com
It doesn't sound vital that you use the rate you might actually be quoted
(and anyway there are loads of other variables which you can't factor in at
this stage) so (for both) I'd use something like base + 2.5%, or maybe (curr
ent) base + 3.5% for fixed (since no-one knows what base will do in next 22+
months). And add an up-front arrangement fee - say 1/4 %? You can then
demonstrate you understand the considerations, which is presumably the
purpose of the project.

The clever bit, IMHO, is forecasting when repayments will be made, and hence
CF f'cast.

HTH
 

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