How Development Finance Works: Typical Loan Amounts and 100% Funding Options
Learn how development finance is structured, typical loan-to-cost and loan-to-GDV limits, and when experienced developers may be able to access up to 100% project funding.
Development Funding
Development Finance for Residential & Commercial Projects
Flexible funding for land acquisition, ground‑up construction, conversions, heavy refurbishments and multi‑unit developments, as well as finance for commercial development. As a specialist development finance broker, we structure and source funding across the market, aligning lender appetite with the specifics of your project, from acquisition through to development exit. We arrange short-term funding for property developers and investors to fund the purchase and construction (or refurbishment) of property, typically repaid through sale or refinance on completion, often onto longer-term investment or buy-to-let mortgages.
What Is Development Finance?
Development finance is a specialist form of short-term property funding used to acquire land, fund construction works, and deliver property projects that fall outside the scope of conventional mortgage lending. It is commonly used by property developers, investors, landowners and, in some cases, first-time developers to fund new-build developments, conversions, major refurbishments and mixed-use schemes.
Unlike a traditional mortgage, funds are typically released in staged drawdowns as the development progresses, rather than in a single advance. This allows borrowers to access capital throughout the build process, with each release of funds linked to construction progress and monitored by an independent monitoring surveyor.
In the UK, development finance is commonly provided by specialist banks and non-bank lenders, with facilities structured around a project's costs, Gross Development Value (GDV), and proposed exit strategy. When assessing an application, lenders will typically consider the experience of the development team, the construction budget, planning position, GDV, and the viability of the proposed exit strategy before committing funds.
Development finance provides the capital needed to move a project from land acquisition through construction to completion, with repayment typically coming from the sale of the completed scheme, the refinance of retained units onto a longer-term facility, or another agreed exit strategy.
How Does Development Finance Work?
Development finance is designed to fund each stage of a property project, from site acquisition through construction to eventual sale or refinance. Unlike a traditional mortgage, the full loan amount is not released on day one. Instead, lenders advance funds through staged drawdowns, allowing capital to be released as the development progresses. Interest is often rolled up or retained within the facility, meaning borrowers do not usually make monthly repayments during the construction phase.
At the outset, the lender will assess the proposed scheme, including the planning permission, construction budget, anticipated Gross Development Value (GDV), borrower experience and proposed exit strategy. These factors help determine how much can be borrowed and whether the project meets the lender's appetite.
Once the facility is in place, an initial advance is used to acquire the site or refinance existing borrowing. Future drawdowns are then released against construction progress. Before each drawdown, an independent quantity surveyor will inspect the site, review costs against the approved budget, and confirm that construction has progressed sufficiently for the next release of funds.
Because construction costs are incurred gradually rather than all at once, staged drawdowns reduce borrowing costs for the developer while allowing the lender to monitor progress and control risk throughout the project.
Repayment typically comes from the sale of completed units, the refinancing of retained properties onto a longer-term investment, multi-unit freehold block mortgage or buy-to-let mortgages, or another agreed exit strategy.
Types of Development Finance
Development finance is used to fund the purchase, construction and refurbishment of property projects, with structures tailored to the type of scheme, planning status, level of works and exit strategy. Below are the most common types of development finance used across residential and commercial developments, typically spanning the lifecycle from land acquisition through to construction and eventual exit or refinance. We support developers across the UK, including London, the South East, the Midlands and major regional cities, as well as rural locations.
Ground-up development finance is used to fund single-unit and multi-unit residential schemes, from first spade in the ground to final sign-off. Loans can include land purchase plus 100% of build costs (subject to lender criteria).
Ground-up new build development finance
Ground-up new build development finance
Refurbishment finance is used to fund structural works, layout changes, extensions, and full internal reconfigurations — with staged drawdowns aligned to your build programme.
Conversion finance is ideal for office-to-residential schemes, commercial-to-residential, barns, and mixed-use transformations. For conversions to residential we can source refinancing via buy to let mortgages, or for conversions to commercial we can source commercial mortgages.
Land purchases can be funded with options available for land with full planning, outline planning, or (in some cases) land awaiting permission.
Development exit finance can be used to refinance completed or near-complete projects to extend the sales period, improve cash flow, or repay costlier development debt.
Development finance for first-time developers, focused on how lenders assess experience, structure risk and fund projects without an established track record.
Development finance for small projects, from single builds to modest schemes, structured around how lenders assess risk, fund delivery, and support a credible exit.
Our Process
At Adler Green, our process reflects how property development finance is structured via a development finance broker, from initial appraisal through to staged drawdowns and final exit.
01
Initial Discussion
We begin with a detailed discussion to understand the project, your experience, timelines and preferred funding structure.
02
Project Review and Information Gathering
We review key project details including planning, drawings, costings, programme, sales values and the proposed exit strategy.
03
Funding Strategy and Lender Selection
Based on the project, we identify suitable development finance lenders and structure the funding approach to reflect the scheme, timescales and risk profile.
04
Terms and Application
We secure indicative terms from appropriate lenders and, once agreed, prepare and submit a fully packaged application with all supporting documentation.
05
Underwriting, Valuation and Legal Process
We manage the process through valuation, underwriting and legal due diligence, ensuring any queries are addressed promptly to avoid delays.
06
Completion and Drawdowns
Property development finance is typically released in staged drawdowns, monitored against build progress and supported by professional valuations. We support you through completion and ongoing drawdowns, coordinating with the lender to ensure funds are released in line with the build programme.
Speak to a development finance specialist today
Take the next step with your property project and find out whether development finance is right for you. We’ll work alongside you throughout, liaising with lenders, managing information requests, and keeping the process moving efficiently from initial enquiry through to completion.
Typical Rates, LTVs & Terms
In addition to interest rates, property development finance includes a range of costs that should be factored into the overall project appraisal:
- Loan size: £250k to £50m+ (project dependent)
- Interest rates: typically 6.5%–12% p.a., often rolled up
- Fees: arrangement fees, exit fees and monitoring costs typically apply
- Max LTGDV: generally 65–70%
- Max LTC: up to 80–90% with some lenders
- Term length: generally 12–36 months
- Drawdowns: staged drawdowns based on valuations
- Borrowing structure: SPV (Ltd company) or personal name
Clients also find out development finance calculator useful to appraisal new schemes.
What Lenders Look For (Checklist)
Lenders assess both the strength of the project and the borrower’s ability to deliver and exit successfully. Lenders typically look for:
- Full planning permission in place (or expected)
- Detailed costs and schedule of works
- SPV or limited company structure (preferred but not essential)
- Evidence of developer experience (first‑timers also considered)
- Appropriate cash/equity contribution
- Clear project exit strategy (sale or refinance)
- Sensible GDV and build cost assumptions
Review key development jargon in our development finance glossary.
Working With a Development Finance Broker
Development finance is not a single product. Terms, leverage and structure vary significantly between lenders depending on the scheme, borrower and exit strategy. Working with a development finance broker allows you to compare options across the market and structure the facility correctly from the outset.
- Access to a broad range of development finance lenders
- Structuring around LTC, LTGDV, drawdowns and exit (including via development exit finance, if required)
- Positioning the project for underwriting
- Managing valuation, QS and legal process
- Avoiding mismatched terms that affect delivery or exit
- Range of development types from first-time developer projects and small development projects, through to new-build ground-up projects and commercial development.
Clients also find our development finance calculator extremely helpful in modelling their development viability.
Find Answers
Development Finance FAQs
Read some of our frequency asked development finance questions. You can also check out some commonly used development jargon in our development finance glossary.
Development finance is a short-term funding facility used by property developers to acquire land, fund construction costs, or both. Funds are usually released in stages as the build progresses, with each drawdown supported by a monitoring surveyor's report. Development finance requires an appropriate exit such as sale or refinance of the new build units.
It depends on your project, but many development finance lenders offer up to 65–70% of GDV and 80–90% of total costs. This might mean up to 70-75% of the initial purchase price, and up to 100% of the build costs. Your leverage will depend on experience, location, planning status and lender appetite.
Having full planning permission will significantly improve your options. However, in some cases, outline consent or a strong planning position may still be considered, depending on the lender and the project.
Where planning is not yet secured, development finance for land purchases could be beneficial.
Some lenders will fund up to 100% of build costs, provided the scheme fits within their overall lending parameters, particularly loan-to-cost and loan-to-GDV limits.
Development finance provides funding for the purchase of land, the construction of a new development, or both. The lender will assess the project's costs, projected Gross Development Value (GDV), developer experience, and proposed exit strategy before agreeing terms.
Once the facility is in place, funds are usually released in stages throughout the build rather than in a single advance. Each drawdown is typically approved following a monitoring surveyor's inspection to confirm that works have been completed as planned. Interest is often charged only on funds that have been drawn, helping to manage costs during construction. The loan is repaid when the completed development is sold or refinanced onto a longer-term facility.
Yes, some lenders will consider first-time developers where the project is straightforward and supported by experienced contractors or professional teams. The strength of the overall proposal becomes particularly important in these cases.
Straightforward cases can complete within two to four weeks. More complex projects may take longer, depending on planning, valuation and legal requirements. Early engagement helps ensure timescales can be met.
Bridging finance provides short-term funding, typically up to 12 months, often used for acquisitions or lighter refurbishment. Development finance is designed for more substantial construction projects, usually over 12–24 months, with funds released in stages as the build progresses.
Property Development Finance Case Studies
These recent examples reflect the types of development projects that we are regularly asked to advise on, and reflect how development finance is structured in practice across different project types and borrower profiles.
Recent Posts
Development Articles
Getting Development Finance Right for Multi-Unit Projects
Discover the key funding considerations for multi-unit developments, from lender appetite and project appraisal through to cash flow, phased drawdowns and exit strategy.
Explore the latest guides, case studies, market commentary and tools relating to Development Finance.
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