Development Finance: ground-up and major projects, funded properly
From single new-builds to multi-unit schemes: how development funding is structured (land + build costs), what lenders fund, and how the money actually flows.
Talk to Ashley about your scheme
How development finance is structured
Two pots: an advance against the land, plus the build costs released in stages as works complete. The ceiling is set two ways, typically up to 85% of total costs and up to 65% of the end value (GDV), and whichever cap bites first decides your facility. Interest rolls up, and everything is repaid from sale or refinance at practical completion.
Run your scheme through the development calculator and you'll see the shape of your deal, including the equity you need to bring, in about two minutes.
"The number that kills first-time developers isn't the rate. It's the cash flow gap between paying the builder and drawing the next stage. We plan that on paper before the first brick."
What lenders look for
- Planning in place (or see pre-planning bridging)
- Experience, yours or your contractor's, formally counted
- Costed build with contingency
- Evidence for the GDV: comparables, not optimism
- Clear exit: sales strategy or refinance terms
Development Finance Solutions from Bridging Finance Broker
Senior debt does the heavy lifting (senior development debt); mezzanine tops up above it; JV equity can replace your deposit for a profit share. And when the scheme finishes but hasn't sold, development exit bridging cuts the holding cost while you sell well.
Your questions
Can a first-time developer get development finance?
Yes, with the right contractor and realistic numbers. Expect slightly lower leverage and more monitoring, and lean on your builder's track record where yours is thin.
How do stage payments work?
Monitoring surveyor signs off progress, then the lender releases the next tranche, usually in arrears. That arrears rhythm is why the cash flow planning matters more than the rate. Staged drawdowns explained.
How much does development finance cost?
Rate plus arrangement fee, exit fees, monitoring and legals. We model the total cost of funds across the whole project, not just the headline rate, because that's the number that decides whether the scheme works.
What is the difference between bridging finance and development finance?
Bridging is one advance against an existing property, months long, repaid from a sale or refinance. Development finance funds land plus a build in staged releases against monitored progress. Rough rule: if the structure stays, bridge it; if you're building, it's development finance. Plenty of deals sit near the line and we place them where they price best. Compare with bridging finance.
Can I get 100% development finance?
Not from a senior lender alone. But stack mezzanine on top, or bring in JV equity for a profit share, and your cash in the deal can get very small. The trade is margin for money, and we'll show you both versions side by side.
Do you make monthly payments on development finance?
No. Interest rolls up into the facility as you draw it and everything is repaid at the end, from sale or refinance. Your cash goes into the build, not into servicing the loan.
How long does development finance take to arrange?
Weeks, not days, usually somewhere around four to eight depending on the scheme. The quality of your pack moves it more than the lender does: planning documents, a costed build, comparables for the GDV. Turn up with those ready and the whole thing accelerates.
Got a deal like this on your desk?
Tell us the numbers and we'll tell you honestly what's achievable.
Prefer to put it in writing? Email support@bridgingfinancebroker.co.uk