<
p>The Welsh Government has introduced a £10 million fund to support the country’s property developers in both the residential and commercial sphere, allowing many previously held back projects to be started.
The fund, known as the Property Development Fund, will be managed by Finance Wales and has been set up in response to strong demand from smaller developers that struggle to access finance from traditional providers.
The Government has claimed that it hopes that the fund remains “evergreen”, with interest and capital repayments being reinvested to support the funding of new deals.
Loans will typically be worth £1 million and lent on a 12-24 month basis, but terms can be extended for particularly worthwhile projects and will be considered on a case-by-case basis.
It is estimated that over the next five years the fund could provide up to £30 million of finance to developers.
Details of the first deal enabled by the fund are expected to be announced shortly.
Though the Welsh Government has access to a £150 million Joint European fund to finance such loans, EU regulations do not allow Finance Wales to invest this money into the construction and property sector.
Instead, the Authority has been adding to a large portfolio of funds over the past year through funding from its own budget.
Most recently, it was announced that a £40 million fund targeting SMEs, called the Wales SME Investment, would be made available alongside a smaller £6 million Micro-Business Loan Fund.
Wales’ Business Minister, Edwina Hart, said: “The Welsh Government is committed to supporting business growth and we listen to business. This fund meets a real need to help small-scale property developers access much-needed finance to fund development in both the commercial and residential markets.
“It was set up in response to a funding gap identified by Finance Wales and will help kick-start development in smaller-scale property ventures.
Speaking about Wales’ wider economy, she added: “Construction is one of our key sectors with the potential to make a significant impact on the economy. The industry plays a vital role in delivering a vibrant economy and a quality environment.
“A stagnant construction market impacts on society in many ways, from a reduction in affordable homes for first-time buyers to businesses unable to find new premises.
She concluded: “Construction projects, for business, public and residential purposes, can be a significant driver of local regeneration, visibly improving local amenities as well as providing a significant number of jobs.
“I am therefore delighted to set up this fund that provides an opportunity to help stimulate the market by supporting many construction ventures that would otherwise not be taken forward."
The Welsh Government has introduced a £10 million fund to support the country's property developers in both the residential and commercial sphere, allowing many previously held back projects to be.
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