Development Finance
Development Finance
Development Finance Solutions
Short-term funding solution designed to support property developers in achieving their goals. Whether you're an experienced developer or starting your first project, Bradgate Financial Solutions helps secure loans tailored to your needs at competitive rates.
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How Does Development Finance Work?
Unlike traditional loans, development finance is typically released in stages. These payments align with the progress of your project, such as completing specific construction phases or milestones. This phased approach ensures you receive funds when needed while allowing lenders to monitor the project's progress.
If your development is already underway and you need additional funds, finance can provide the boost required to keep your project on track.
What Can Development Finance Be Used For?
This type of finance provides the flexibility to bridge funding gaps, allowing you to capitalize on opportunities without delays.
- New build residential properties
- Commercial developments such as offices or retail spaces
- Land purchases for future construction
- Auction purchases for renovation and resale
What Do You Need to Secure Development Finance?
Obtaining finance requires a clear and detailed plan. Lenders will expect you to provide:
Demonstrating confidence and capability in executing your project helps strengthen your application and improves your chances of securing favorable terms.
- Comprehensive project details, including timelines and budgets
- Evidence of your experience or ability to manage the development team
- Information about key professionals involved, such as architects, builders, and site managers
Types of Development Finance
Not every building project needs the same facility, and choosing the wrong one is expensive.
Ground-up development
Land acquisition plus construction from scratch. Funded against the finished value of the scheme, with your own money generally going into the land and the build drawn down in stages.
Heavy refurbishment
Structural alteration, change of use, extensions or anything requiring building regulations sign-off. Too substantial for a standard mortgage, and usually handled as development finance rather than a simple bridge.
Light refurbishment
Cosmetic work with no structural change and no planning requirement. Often better served by a bridging facility with a refurbishment element, which is quicker to arrange and cheaper to run.
Conversion and permitted development
Commercial buildings converted to residential use, or upper floors above retail turned into flats. Permitted development rights can remove the need for a full planning application, though prior approval is still normally required.
Development exit finance
A separate facility used once building work is complete or nearly so — covered below.
How the Facility Is Structured
Most developers meet only senior debt, but a scheme that will not work on senior alone is not necessarily unfundable.
Senior debt
The main facility, secured by a first charge. The cheapest money in the structure and the starting point for almost every scheme.
Stretched senior
A single lender providing higher leverage than standard senior terms, priced accordingly. Simpler than layering two lenders, since there is only one facility and one legal process.
Mezzanine finance
A second-charge facility sitting behind the senior lender, used to fill the gap between what senior debt covers and what you can contribute. Materially more expensive than senior debt, and the senior lender must consent to it.
Joint venture equity
A funding partner provides most or all of the capital in exchange for a share of the profit rather than interest. Suited to developers with a genuine track record but limited cash — and the most costly option if the scheme performs well.
Development Exit Finance
When a scheme reaches practical completion the risk profile changes completely: there is no longer a build to go wrong, only units to sell. Development finance priced for construction risk becomes poor value at that point.
Development exit finance refinances the outstanding facility onto cheaper short-term debt while the units sell. It reduces the monthly cost, can release equity for the next project, and removes the pressure of a development facility running to term — which is what forces developers into discounting stock they should have held.
It is worth planning before you need it, not once the original facility is close to expiry.
Funding a First Project
Development lending is experience-led, and a first scheme is the hardest to fund. It is not impossible.
Expect to contribute more of your own capital than an established developer would, and to be examined more closely on how the project will actually be delivered. An experienced main contractor with a verifiable record does a great deal of work here — lenders are underwriting the team as much as the borrower.
Starting small helps more than most first-time developers expect. A single unit or a modest refurbishment completed properly and evidenced creates the track record that makes the second scheme straightforward. Some lenders will not consider first-time developers at all; others will, with the right professional team around you. Knowing which is which before you apply saves a great deal of wasted time.
Why Choose Bradgate Financial Solutions?
At Bradgate Financial Solutions, we combine financial expertise with an understanding of the property market to find the best finance options for you. Our team works with a wide range of lenders to deliver tailored solutions that meet your specific needs.
Next Steps
At Bradgate FS we aim to make choosing and applying for a mortgage, protection, loan or insurance as stress-free as possible.
Take the next step in your property journey with confidence. Contact Bradgate Financial Solutions for a free consultation and let us help you find the perfect finance solution for your project.
Related
Important information
Development finance is not regulated by the Financial Conduct Authority.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR LOAN.
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