Investor Guide
Understanding borrower contribution, deposit and source of funds.
Specialist property finance still needs clear borrower contribution. This guide explains how direct investors can prepare deposit evidence, works contribution, cost support and source-of-funds information before a finance review.
Start Investor Quote →Why contribution matters
The lender needs to understand the borrower’s own position.
A strong property opportunity can still be difficult to progress if the borrower contribution is unclear. The lender needs to understand how the purchase, refinance, works, interest, fees and costs will be funded. Even where the property has a strong value story, the borrower’s available funds can affect confidence, completion certainty and risk.
Contribution is not only the deposit. It can include cash to complete, refurbishment funds, professional fees, valuation fees, legal costs, contingency, interest servicing, interest roll-up assumptions, cost overrun support and money needed to stabilise the property before sale or refinance.
Practical point: a lender will usually ask where the borrower’s funds are, where they came from and whether they are available when needed.
Deposit evidence
Show what is available and how quickly it can be used.
For purchase cases, the deposit position should be clear early. If funds are in a personal account, company account, solicitor account, sale proceeds, investment account or joint venture structure, explain that position. If the funds are not yet available, explain what needs to happen before completion.
Cash held
Bank statements showing funds available in the relevant personal, company or SPV account.
Sale proceeds
Evidence of sale, completion timing and whether the funds will be available before the target completion date.
Partner funds
Where a JV or investor contributes, the relationship, amount, terms and source should be explained.
Source of funds
Where the money came from is part of the review.
Source of funds is different from proof of funds. Proof of funds shows money exists. Source of funds explains how it was generated. It may come from savings, property sale, company profits, refinance, inheritance, investment income, partner contribution, director loan or other sources.
- Personal savings or retained business profits.
- Sale proceeds from another property or asset.
- Company funds or director loan account.
- Gift, loan or equity contribution from another person.
- Joint venture partner or co-investor contribution.
- Refinance proceeds from another property.
Works and contingency
Contribution is also about what happens after completion.
Many specialist finance cases involve works, refurbishment, lease extension, title strategy, commercial repositioning or stabilisation. The borrower may need funds after completion to finish the plan. If the borrower cannot fund the works, the exit may not happen on time.
A good application separates purchase funds from works funds and contingency. If works are essential to the value or exit, the lender will want to understand the schedule, cost, contractor position, contingency and whether funds are available if costs increase.
Useful question: if costs rise or the exit takes longer, does the borrower have enough liquidity to keep control of the transaction?
Third-party money
Joint venture and investor funds need clear terms.
Third-party money can strengthen a transaction if it is clear and documented. It can weaken a transaction if the lender cannot understand who is contributing, what they expect in return and whether they control the borrower.
Equity
A partner contributes capital in return for ownership or profit participation.
Loan
A partner expects repayment, possibly with interest, priority or a formal agreement.
Support
A partner provides contingency or experience, but the basis still needs to be clear.
Common issues
What can slow the application down.
- Deposit funds are promised but not yet available.
- Money is held by a person or company outside the borrower structure.
- Third-party contributions are not documented.
- Funds move through several accounts without explanation.
- Works costs are underestimated or no contingency is available.
- The borrower relies on future refinance or sale proceeds that are not guaranteed.
- Source-of-funds evidence is incomplete or inconsistent with the stated story.
Preparation checklist
What to organise before requesting a quote.
Amount
Deposit, fees, works, contingency, interest and other costs that the borrower must fund.
Location
Where the money is held now and whether it can be used by the borrowing entity.
Source
How the money was generated and what evidence supports the explanation.
Direct investors can use the Lending Explained page to download the direct-client guide and editable documents before starting the quote route.
Lending Explained → Start Investor Quote →