Frequently Asked
Questions

Development finance is a specialist short-term loan used to fund the construction, conversion or refurbishment of property. Unlike a mortgage, funds are released in stages as construction progresses, and the loan is repaid when you sell or refinance the completed units.

Typically 60–70% of the Gross Development Value (GDV) or 80–90% of total costs (with mezzanine). Senior debt alone usually covers 60–65% of total project costs. We arrange facilities from £250k to £100m+.

Senior development finance rates typically range from 0.65% to 1.25% per month, depending on the lender, your experience, scheme size, and risk profile. Mezzanine is more expensive — typically 12–18% per annum.

Usually not. Most development finance interest is "rolled up" — it accrues during the loan term and is repaid along with the capital when you sell or refinance. Some lenders offer the option to service interest monthly, which reduces total cost.

Yes. Many lenders specifically cater for first-time developers, though they may require a stronger professional team, more equity, and a simpler project. We have extensive experience funding first-time developer projects — see our First-Time Developer Hub.

Typically 25–40% of total project costs as equity. This can be cash, land equity (if you already own the site), or a combination. With mezzanine finance, your equity requirement can be reduced to as little as 10–15%.

4–8 weeks from initial enquiry to drawdown is typical. Emergency or rescue situations can be faster (2–3 weeks). Complex structures with mezzanine and equity may take 8–12 weeks.

Ideally yes — most development lenders require granted planning permission. However, we can arrange bridging finance to acquire a site pre-planning, then transition to development finance once planning is confirmed.

Mezzanine (or "mezz") is a second-charge loan that sits behind the senior debt, filling the gap between senior lending and your equity. It allows you to borrow more — up to 85–90% of costs — in exchange for a higher interest rate and potentially a profit share.

A development appraisal is a financial model of your project showing all costs (land, build, fees, finance, sales) and revenues (GDV). It calculates your profit margin and demonstrates viability to lenders. We write the appraisal for you — it's part of our service.

Our standard broker fee is 1–2% of the gross facility amount, payable on completion (when the loan draws down). We don't charge upfront fees, retainers, or application fees. We do the work first and only get paid when you get funded.

A monitoring surveyor (or "MS") is an independent RICS surveyor appointed by the lender to inspect construction progress before each drawdown is released. They verify that work has been completed to standard and that remaining costs are sufficient to finish the project.

Not quite — but close. With a combination of senior debt, mezzanine, and equity co-investment, we can structure funding covering up to 90–95% of total costs. The remaining 5–10% must come from your own resources.

An exit fee (or redemption fee) is a charge some lenders apply when the loan is repaid — typically 0.5–1.5% of the loan amount. Not all lenders charge exit fees, and we factor this into our cost comparisons.

No. We arrange development finance across England, Wales, Scotland, Northern Ireland, the Channel Islands and the Isle of Man. Some lenders have geographic restrictions, but our panel covers the entire UK and Crown Dependencies.

Residential new-build, conversions, refurbishments, commercial development, mixed-use schemes, student accommodation, care homes, build-to-rent, affordable housing — we cover all property development sectors.

Yes. We can arrange bridging finance for land acquisition (with or without planning), development finance for permitted sites, and option/conditional contract funding where exchange is subject to planning.

Forward funding is where an institutional investor funds your entire development from day one in exchange for ownership on completion. They pay all construction costs as you build. It's typically used for build-to-rent, student accommodation, and affordable housing schemes.

After the initial drawdown (usually land acquisition), further funds are released in tranches as construction progresses. You submit a drawdown request, the monitoring surveyor inspects, and funds are released — usually within 5–7 working days.

If your build programme overruns, you may need to extend the loan facility. Extension fees are typically 1–2% plus potentially increased interest. We help you manage this process — and we always advise building contingency time into your programme from the start.

No. We are an independent finance broker — Funding Developers Ltd (Co. 09221311). We don't lend our own money. We search the whole market to find the best funding structure for your specific project, from our panel of 110+ specialist lenders.

LTGDV stands for Loan to Gross Development Value — the total loan (including all tranches) as a percentage of the completed development value. Lenders typically cap at 65–70% LTGDV for senior debt.

For most development finance applications, yes. A QS (quantity surveyor) cost plan gives lenders confidence that your build costs are realistic and comprehensive. For smaller schemes (under £500k build cost), some lenders accept a contractor's fixed-price quote instead.

Yes. If your project has de-risked (e.g., planning upgraded, pre-sales achieved, construction advanced), better terms may be available. We can refinance your existing facility mid-build if it makes financial sense.

The facility agreement is the legal contract between you and the lender setting out all terms — loan amount, interest rate, fees, drawdown conditions, covenants, security, and repayment. Your solicitor should review this carefully before you sign.

Bridging finance is a short-term secured loan — typically 1 to 24 months — used to "bridge" a gap in funding. Property developers commonly use bridges for site acquisition before planning is granted, chain breaks, auction purchases, and short-term capital needs. Rates are typically 0.55–1.0% per month.

Yes — this is one of the most common uses. You bridge the site purchase, apply for or wait for planning permission, then refinance into a development facility once planning is granted. We arrange the bridge and the subsequent development finance as one coordinated strategy.

Bridging finance is a single lump-sum advance against existing property value. Development finance is drawn in stages as construction progresses and is sized against the Gross Development Value (GDV). Bridges are faster (days to weeks), dev finance takes longer (weeks to months). Different lenders, different criteria, different structures.

Yes. We operate bridging.fund — our specialist bridging finance brokerage — alongside developing.fund. Whether you need a bridge for site acquisition, a development facility for construction, or both in sequence, we handle the full journey.

Yes. Auction purchases typically require completion within 28 days. We can arrange bridging finance within this timeframe — sometimes as quickly as 7–10 days for straightforward cases. The bridge is then refinanced into a development facility if the site has development potential.