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Our company
Shojin is an FCA-regulated fractional investing platform enabling global investors to build their wealth from UK-based real estate investment opportunities.

Invest - Products - Senior

Being first in line is as secure as it gets

Lend senior loans for UK property projects to enjoy prioritised fixed returns, comfortably secured by an underlying asset.  

What is a senior loan?

The primary source of finance for a real estate project

Property developers take on senior loans to attain the majority of the funds required to complete a property development project, or to use as an interim funding solution to accomplish strategic near-term objectives. They are always secured by a first charge on the property.



How does a Shojin senior loan work?

Providing the majority of funding for property projects

Senior loans are the most inexpensive form of funding for property developers, with the lender very well protected. 


We provide senior development loans to fund construction for the duration of the project,  typically last 12-36 months.


We also provide Bridging loans for developers to accomplish strategic near-term objectives before the main financing is put in place. These have shorter time frames of between 3-12 months.


In both cases investors are protected by low loan-to-value ratios and first charges against the property assets.

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First in line to get paid out
The risk for an investor is that the borrower is unable to repay the loan, in which case it goes into default. If that happens, the land or building will be sold and the Bridge loan repaid first. This takes extra time for the investment to be returned, but investors are protected by fixed returns until they are paid out.
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Interest is deducted in advance
The total interest due on the loan is usually deducted from the funds released at the outset, for example if the property value is for £1m and allows for a 70% LTV loan at 10% per annum, then the actual amount the developer will receive will be £630k (70% of £1m less interest of £70k).
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Low ratios make for safe lending
Senior loans ration are up to 65% Loan to Gross Development Value (LTGDV) and 80-85% Loan to Cost (LTC). Valuations are provided by an independent third party RICS accredited valuer.

Why choose a Shojin senior loan?

Senior loans are repaid first

Protection mechanisms
Senior loans present the lowest risk opportunities due to the multiple layers of protection offered to investors.
Scope for shorter timeframes
Bridging loans can offer investors shorter investment timeframes, helping compound returns through multiple recycled investments.
Risk / reward profile
Senior lending is the sits in the most secure part of funding structure. With a formal 1st charge and fixed returns, investors remain protected.
Choose from the following to find out more.
Shojins Capital Stack
Capital stack

The capital stack represents the layers of funding and the order of repayment. First is the senior debt, then mezzanine, followed by preferred equity and finally equity.

  • Value above and below
    The value that sits below the investor is important because this is the amount that needs to get generated and repaid before the investor. The value above is equally crucial because it represents the cushion that investors have before their returns start getting affected.
  • Key ratios
    The position in the capital stack is indicated by the Loan-to-value (LTV), Loan-to-Gross-Development-Value (LTGDV) and Loan-to-cost (LTC), the higher the ratios the higher the risks.
  • Seniority matters
    The position in the stack becomes relevant if a project is not performing and fails to pay out all the funds, from the bottom of the stack upwards. The higher you rank, the more likely your capital and interest will be affected.

Assessing the suitability of a development in a given location is critical to the success of the project. Physical, economic and cultural factors interact with the development's design and purpose, affecting its viability and attractiveness to potential buyers or tenants.

  • Demographics of potential buyers
    The demand for a development is driven by the lifestyle preferences, practical needs, incomes and aspirations of potential residents. Whether located in an urban or rural locale, the development must cater for the requirements of buyers in that area.
  • Amenities
    The availability, quality and proximity of infrastructure, including transportation networks, schools, shopping facilities and employment opportunities play a vital role in determining a development's desirability.
  • Physical characteristics
    The geography of a location, such as terrain, climate, and proximity to natural resources, can impact project feasibility and execution. Extreme weather conditions, geological instability, or environmental regulations can lead to delays, increased costs, or even project abandonment.

To protect investors from individual project risks, protection mechanisms are put in place to secure investors from scenarios that put their investments at risk. They incentivise the developer to repay funds for investors to exit the projects.

  • Charges held with land registry
    A charge is the means by which lenders enforce their rights to property. A first charge entitles the lender repossess and sell the asset to recoup funds first, followed by a second charge which is paid out after the senior lender in priority over the developer’s equity.
  • Personal guarantees
    Borrowers may be asked to provide personal guarantees to make them legally liable to repay the loan. Whilst this is a legitimate way to add further security, it is also a way to keep the borrower focussed on repaying the loan especially if the scheme runs into trouble.
  • Additional security
    This may include cost overrun guarantees, debentures or cross-collateralisation across other assets the developer owns, which in the event of a default, can be repossessed and sold.

The complexity of a construction project impacts the level of risk for investors. This is driven by a combination of factors including intricacy of design, engineering requirements, execution, and management required to successfully complete the project. Fixed-cost contracts and professional advice from surveyors is typically required to manage these risks.

  • Scale of the build
    Larger intricate projects, such as high-rise buildings or sprawling housing developments, tend to be more complex due to the increased scope, logistics, and coordination involved. They typically require structural elements that demand careful engineering and construction expertise.
  • Nature of the site
    Challenging site conditions, such as irregular terrain, poor soil quality, or tight spaces with reduced access, can complicate construction logistics and impact foundation and site preparation.
  • Architectural design and permissions
    Unique, innovative, or intricate architectural designs can lead to complexity in construction, requiring specialised skills, materials, and precision. Likewise, planning conditions dictate specific delivery requirements and adherence to compliance.

Project phase

The stage at which investors come into the project determines the level of risk. Generally, the earlier the investors come into a development project, the more risk they take on as there are more milestones for the developer to hit. There are several categories of phase that should be considered.

  • Planning status
    A development project with no planning permission is ultimately a speculative play as it may take longer than expected, or in some cases never come through at all. Whilst if full consented planning or permitted development rights (office to residential conversions) are in place, you know what is being built and the associated value of this.
  • Type of development
    Full construction, conversion or renovation projects all have different levels of risk. If the structure of the building is already existent there are no associated costs uncertainties. Conversion and renovations are simpler to deliver which reduce time and cost risk.
  • Status of development
    Developments take time; there are many items which influence costs and timelines. Coming in at an earlier stage means that tendering, site ramp-up and preliminaries are required which present cost uncertainty. The closer you are to construction completion, costs are determined and it become more about realising the value.
Exit strategy

In order to get repaid and exit a project the value needs to get realised to release cash. This can take the form of the sale of the units or the refinancing of the block in its entirety.

  • Selling individual units
    Selling units is dependent on demand, attractiveness and local competition from similar units in the area. Sales and marketing strategies need to be executed to encourage pre-sales ahead of construction completion and bulk sales to reduce risk.
  • Refinancing to release funds
    Another option available to developers to repay investors is to refinance the entire finished block. A completed development commands a higher value than previously, against which a loan can be raised to repay investors. If the value is sufficient, this is likely a quicker solution than individual sales.
  • Occupancy for asset investments
    For income-generating assets such as student accommodation blocks that depend on occupants, pre-secure locked in tenancies reduce risks. Likewise for commercial assets, established tenants with strong covenants provide stable cashflows which reduce the risks.
Developer capability

A developer’s track record dictates their suitability to take on and deliver a given project. Their team, their financial credentials, capacity and trustworthiness all impact risk.

  • Previous developments
    Past performance is used to assess their ability to handle potential challenges and mitigate risks. Similarly, their reputation can influence the market's perception of the quality and value to attract buyers.
  • Contractor and supplier relations
    Established developers often have built relationships and with reliable contractors and suppliers, and have a strong professional team working for them, reducing the risk of delays or disruptions due to poor workmanship, material shortages or technical failures. Additionally, they need to have the capability to deal with situations where subcontractors and suppliers underperform or go out of business.
  • Financial standing
    A developer’s credit history is an indicator of how their previous developments have performed. Their asset and liabilities statements indicate previous success and ability to cashflow construction between drawdowns, provide personal guarantees and cross collateralise across their other assets to reduce the risks for investors.

Time plays a critical role in property development and has a significant impact on the associated risks. It is usually time, rather than cost, that affects a project’s success and profitability.

  • Market fluctuations
    The longer a project takes to complete, the more susceptible it is to shifts in market conditions and inflation. Changes in housing demand, housing prices, material and labour costs and economic factors can affect the project's viability and potential returns.
  • Financing costs
    Extended project timelines lead to increased financing costs in the form of interest payments. Whilst this might not impact a senior lender’s position, this does reduce the cushion for those further down the repayment chain. Equally, changes in interest rates overtime can increase overall project costs.
  • External factors
    Ove over a prolonged development period, geopolitical events, economic recessions, and unforeseen global disruptions can impact a project's risk profile.


The frequently asked questions and key terminology for investing in senior loans.

What is a Senior loan? caret-down-light
A senior real estate loan, also known as senior debt or a senior mortgage, is a primary form of real estate financing secured by a property's collateral. It holds the highest priority for repayment in the event of default or foreclosure, making it a secure investment for lenders.
Why would a developer take out a Senior loan? caret-down-light
Borrowers use senior loans to acquire, refinance, or develop real estate assets. This enables them to lower their equity commitment, spread risk, and seize investment opportunities that they would be able to take on using only their own funds.
What are the characteristics of a Shojin Senior loan? caret-down-light
Shojin Senior loans provide a fixed, rather than variable, return and are typically secured by a 1st charge over the underlying asset. They go up to 65% LTGDV / 80-85% LTC.
What are the returns for investors on a Senior loan? caret-down-light
Investors can expect returns of 8-12% per annum on Senior loans depending on the loan-to-value and loan-to-cost ratios and other risk factors associated with a given project.
What is the difference between a Senior loan and a Bridge loan? caret-down-light
Whilst both provide fixed return and are typically secured by a 1st charge over the underlying asset, they serve different purpose. A senior loan is a long-term loan that is typically used for property acquisition, development, or refinancing. In contrast, a bridge loan is a short-term, interim financing option used for immediate capital needs, such as closing a property purchase before securing a long-term loan. They serve as a temporary bridge until a more permanent financing solution, like a senior loan, can be secured.
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