If you’re planning a property project that goes beyond a standard house renovation or buy-to-let purchase, you’ll likely come across the term development finance. But what does it actually mean?
In simple terms, development finance is a short-term loan used to fund the construction, renovation, or conversion of property. It is designed specifically for developers, investors, and builders who need quick access to capital in order to bring a project to life.
Unlike traditional mortgages, which are often slow and inflexible, development finance is tailored to the cash flow needs of property development projects. Whether you’re constructing a block of flats, converting an office into residential units, or carrying out a large-scale refurbishment, development finance gives you the financial support to move forward with confidence.
How does development finance work?
Development finance is usually released in stages, rather than in one lump sum. Here’s how it typically works:
- Initial loan release: A portion of the loan is released at the start to help purchase the site or fund early-stage works.
- Drawdowns: The rest of the loan is made available in phases, aligned with key stages of the construction. Before each release, a lender-appointed surveyor usually visits the site to confirm progress.
- Interest payments: Interest is often “rolled up,” which means it is calculated throughout the term of the loan but only paid at the end, once the project is complete or the property is sold or refinanced.
This staged structure helps developers manage their cash flow and focus on the build without the pressure of monthly repayments during construction.
Who offers development finance?
Development finance is a specialist product, so it is not available from every lender. We are one of the UK’s leading brokers in this area. We work with a wide panel of trusted lenders and match clients with the most suitable funding options for their specific development needs.
They can help secure financing for a range of project types, including:
- Ground-up residential and commercial builds
- Property refurbishments and conversions
- Part-completed developments
- Mixed-use schemes
With access to funding from £50,000, we offer solutions that move at the same pace as your project.
Why choose development finance?
There are several reasons why property professionals choose development finance over more conventional funding:
- Speed: You can secure funding quickly, which is vital in competitive property markets.
- Flexibility: Loans are tailored to your project’s size, duration, and complexity.
- Higher borrowing potential: You may be able to borrow a larger percentage of the total project cost than with a traditional loan.
- Industry expertise: Specialist lenders understand the challenges of development and can offer valuable insights alongside the funding.
Final thoughts
To sum up, development finance is a fast, flexible, and specialist funding option designed for property projects that go beyond the ordinary. If you’re looking to build from scratch, complete a conversion, or finish an incomplete site, this type of finance can provide the support you need to succeed.
For expert advice and access to the best deals on the market, get in touch with our team today and they will help you secure the right finance to move your project forward with confidence.