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Any Credit HistoryMarket Leading RatesJoint VentureMezzanine FinanceQuick DecisionExpert AdviceDevelopment ExitNo Monthly PaymentsFast completions UK wideInstant answersJoint ventures availableFCA regulated 667602Market leading ratesOpen 7 days until lateFree valuation and legal fees5* TrustpilotUsing property development finance to fund a project offers several clear advantages. Even if you have enough cash on hand, it's still worth considering a development loan for part of the project.
To understand how a development loan can help you achieve higher profits, see the example scenario below*..
*This is an illustrative example only. Please contact our team to discuss your exact project quote in more detail.
| Description | Amount |
|---|---|
| Initial investment | £125,000 |
| Development loan | £575,000 |
| Total project build cost | £700,000 |
| Loan interest | £115,000 |
| Broker/lender fees | £4,500 |
| Solicitor fee | £2,750 |
| Completed sale price | £1,325,000 |
| Total profit on completed project sale | £502,750 |
When looking for property development finance it is important to identify the type of project being planned by the developer in order to access the correct funding product. Types of works can include:
New builds nearly always require development finance loans. Once the project is completed, developers may use development exit finance as a more cost-effective solution, but this cannot be done before the project is watertight.
To accommodate this type of project refurbishment finance is typically the correct type of loan to use, however if the project is larger than the norm, development finance may be a better alternative.
A refurbishment loan is a type of bridging finance generally used for property renovations. It can be used for various improvements including, installing a new roof, general structural changes, building an extension, refurbishment, and decoration.
Property investors or developers may want to buy property which needs development or completion work still doing and are unable to get funding from their bank. This is a typical scenario when a bridging loan is a suitable alternative.
Development finance loans are typically paid in one of the following three ways:
The total loan amount is paid in full, using the profits, when the project is complete, and the properties have been sold.
This usually happens when the developer wants to keep the development for either personal use or for rental purposes.
This type of short term loan is often used to fund a new development project before the current project is sold. It can also be used to give developers a bit of breathing space to complete minor works and find buyers.
Development finance funds projects like housing, infrastructure, and commercial developments that boost economic growth. In the UK, it involves a mix of public and private funding, detailed planning, and ongoing evaluation.
Planning permission is needed for most projects. Types include:
Loan amounts depend on the project. For residential properties, you can typically borrow up to 65% of the property’s purchase price and up to 100% of build costs, paid in stages.
Yes, lenders require the borrower to contribute their own funds to the project.
Yes, a solicitor is required for the legal aspects.
Use our online calculator to determine the loan repayment terms for your desired development or construction project. Discuss your quote with us for a quick decision.
The purpose of the facility is to provide the developer with additional time to sell their completed development, while keeping costs as low as possible.
Qualifying for finance as a first-time developer can be challenging. This is why it is advised to seek support of an independent broker at the earliest stage.
Our products are suitable for large and small hotel development projects of all types, from repurposing existing properties to building new hotels from scratch.
Joint venture development finance works similarly to conventional development finance. However, no deposit needs to be paid and rates are typically higher.
Mezzanine finance, aka mezzanine funding, effectively enables property developers to 'top up' their first-charge development finance facility to access extra funding.
No Personal Guarantee (PG) development loans are effectively a form of unsecured funding for major property development and construction projects.
Whether your goal is to maximise the value of a property you plan to sell or to boost rental income long-term, a refurbishment finance loan could be just the thing.
Senior debt development finance is the primary source of funds in the form of a first-charge loan. It is considered a lower-risk facility on the part of the lender.
Stretched development finance can be the perfect choice for investors and developers looking to stretch their own equity as far as possible with borrowing for up to 90%.
'Light refurbishment' is used for cosmetic upgrades and minor improvements. 'Heavy refurbishment' is used to raise funds for structural improvements.
Commercial property development finance can be used to fund, build or develop a property or be used to expand your current business property or space.
Permitted development funding emerges as a financial solution tailored to specific projects where prior planning permission is not needed.
No matter the scale or scope of your ground-up development, lets work together to breathe life into your vision.
Working with developers nationwide, we provide access to flexible funding enabling the inception and realisation of high-value student accommodation projects.
Build to Rent is a property development strategy crafted specifically to cater to the rental market, diverging from the traditional focus on long-term home ownership.
