Development Finance

Financing for your business.

For property developers

As a property developer you know it is so important to have the right funding in place to suit a project. The finance is the most important and critical part of any development but it is often overlooked. Incorrect funding for a project can seriously damage the viability of a project, causing delays by not having the drawdowns when required. 1st Business Finance have been arranging development finance for all types of clientele, both the new developer and the long established development company. We have been arranging development finance for many years and have gained a reputation for being able to find the right finance for any development. We have arranged funding for both single properties and projects of over 100 units.


At 1st Business Finance we both know and understand how development finance works and we are able to help prepare the necessary application and make sure that all options have been considered. We look to find the most suitable finance at the right price and ensure there is sufficient funding for the whole project. We will guide you through the whole process. We will help you prepare a development appraisal as this is what a lender will base their lending against to be sure the project is viable.

Types of property development funding

The development market is current slight with certain lenders only considering projects over £500,000 but more often £1,000,000 and these lender will offer rate from circa 6.5%. For the small projects we have the bridging lenders who lend on these at rate from 1% per month. If we look at the first option the lenders will lend a percentage of the Gross Development Value (GDV) of the project and will lend between 60% to 65% of the value and from between 75% to 90% of all costs and will include the roll up of interest which means interest is not payable during the build and only payable at the end when the properties are sold. On the smaller deals lender will look at lending between 65% to 70% of the land value and 100% of the build costs and the rate will be from circa 1% per month again with roll up of interest. Sometimes on certain development we can gain upto 100% of the funding by using specialised lenders who will use Mezzanine Finance and will look for a share of the profits on the deal. This will work of some deal but not on all and often depends on the project and the area.

We keep things simple

Lenders look for developers with experience and a good track record and for the less experienced they look for the team around him to have the right experience either a good developer or good architect who will help control the development. When a development is built and finished we can then raise finance against the development as a Development Exit Loan which enable a developer to purchase another site and start the whole process again while the developed properties are sold and the current terms for this are upto 75% of the finished value / sale prices at a rate of 0.75%. This is a useful way so lend can keep developing and are not held up while all the houses are sold. For those developers that wish to keep all or some of the development as an investment we are able to arrange a Buy to Let mortgage or a But to Let investment mortgage for a number of them. We find developers like this as by keeping some it builds up an investment portfolio and for their pension planning.

The property development criteria is:

  • Over £1m upto 65% of GDV but no more than 90% of costs from 6.5%
  • Below £1m upto 65% of land value with rates from 1% per month.

How we can help you

We have an unrivalled panel of commercial mortgage lenders, in most cases, we are able to minimise the time from application to completion by carefully assessing your circumstances against our lender panels current loan criteria.

Call us now to enquire about commercial mortgages, plus current availability and suitability for your needs:

01884 508 168

Other services

Bridging Loans

These are loans for a short period of time, normally secured against property or land ...

Commercial Finance

1st Business Finance offers you over 20 years experience in placing commercial finance...

Development Finance

As a property developer you know it is so important to have the right funding in place ...