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Development Finance

Plan A Short Term Loan

This can be arranged as a short-term loan for residential property developments, to help buy land or complete construction. It is then redeemed by either the sale or refinancing of the developed asset.
 

What is property development finance?

UK property development finance is an option used by developers to help cover a project's costs. This could include the renovation of an existing property, a conversion of property types or a new build. 

The types of development finance available include:

  • New builds
  • Residential property development
  • Commercial property development
  • Renovations or refurbishments
  • Conversions
  • Converting single-unit developments to multi-unit
  • Development bridging loans / bridging finance (used to help finance a recently completed project whilst the units are sold).

A great aspect of this financing option is its flexible use by investors or owner-occupied developments. Whether it is your first project or an experienced developer, let us help you find the best rates. 
 

How much can I borrow as property development finance?

Looking at how much you can borrow for this type of financing needs to factor in all the costs involved in a project, including the costs of the land, development, lender fees, professional costs (such as solicitors) and any contingency costs in place.
 
Depending on the lender, the typical amount you can borrow is:

  • 50–70% of the land or site’s total cost 
  • 100% of the build’s cost (provided it is within 60–70% of Gross Development Value (GDV).

The maximum term you can take out development finance is between 12–36 months.
 

What are the advantages of development finance?

  • Allows borrowers access larger sums of money
  • Funds to get your project underway
  • The total money borrowed can cover 100% of construction costs, with no specific upper limits
  • You can secure money on properties and sites that other lenders may consider unsuitable, such as rundown and derelict buildings
  • The finance can be repaid relatively quickly, which keeps borrowing costs to a minimum
  • Interest is charged only for funds that have been released (which shows the benefits of the funding being spread throughout the stages of a project)
     

How does property development finance work?

This form of financing is always tailored to a specific borrower's requirements and their project's specifics. The key stages in the process for development finance / development loans are:

  1. An initial enquiry (free advice and an obligation-free consultation)
  2. Agreement in principle is issued to the borrower (the indicative terms of the financing)
  3. Development site visit (to establish the project's viability)
  4. An independent valuation of the project's value
  5. A formal loan offer
  6. Solicitor involvement (legal support and advice)
  7. Completion of the loan and the first payment
  8. On-going instalments to fund the project if required
  9. Repayment of the loan at a later date
     

We make finding the best financing options for you an easy task

Using our long-standing relationships with the UK's top lendings, and our track record of excellence within the industry, you can be sure that we will compare and secure the best development loan rates. 

We have you covered; get in touch for any advice or to discuss the wide range of financial services we provide, whether you are:

  • Experienced in property development 
  • Developing your first property
  • Buying at auction so you can refurbish and flip for profit
  • Building your property portfolio
  • Partway through a development project and require funds
  • Converting office blocks to residential properties
  • Developing student pods / student accommodation.
     

Specialist Finance Panel

Given that short-term loans, including development finance, are typically more expensive forms of borrowing, it is essential to consider your exit strategy before committing to a finance package. 

For example, if you expect to be able to refinance by a particular date, but development work is held up because of a planning issue or utility delay, you could be left at risk if that delays your ability to get a new finance deal approved.
 
Please note that specialist finance of this type is not usually regulated by the Financial Conduct Authority (FCA); therefore, our funders can afford to adopt a more flexible approach to assessing deals. Whatever your situation, give us a call to see if we can help.
 
As an FCA-regulated broker, we will only recommend development finance if appropriate for your particular circumstances. If it is not, we will still suggest alternative options for short-term finance that are more suitable.
 
The quickest way to have your short-term finance enquiry assessed is to telephone one of our advisers on 01738 583008 or complete the online enquiry to start the ball rolling.
 
Commercial Mortgages up to 75% LTV are also available, with funding available from High Street and off-High Street or non-traditional lenders.
 

Introducers

If you have landed on this page and you are not a direct client looking for a lending solution, perhaps you are interested in introducing business to us? If so, please call now for more details or follow the Introducers Link.

The Lending Channel is a member of the National Association of Commercial Finance Brokers (NACFB).
2/1 King James VI Business Centre, Friarton Road, Perth, PH2 8DY
Tel: 01738 583008 | Fax: 01738 500402

The Lending Channel are authorised and regulated by the Financial Conduct Authority.
Company number SC334818
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