This type of financing is designed specifically to fund property development projects, and can be used for various types – whether it’s partial or full funding for a small or large scale development, involving construction, refurbishment, or conversion of new or existing buildings.

Developer finance is usually provided as a short-term loan released in stages as the development project progresses, ensuring the funds are available when the developer needs them, so they can complete the project efficiently. Once all work is finished, the loan is typically repaid through the sale of the property or refinancing with a longer-term agreement, like a commercial mortgage.

How long it takes to apply for development finance and how much a developer can borrow depends on factors such as the value of the property, the development costs and timescale, its expected end value, previous experience, and exit strategy for repayment. If all documents are in order and a valuation can be carried out quickly, the process should be streamlined.

Talk to us at ABC+ Architects Certificate to learn more about how development finance works.

As the name implies, development financing can only be used to finance developments – it must be used specifically for the property development costs applied for, such as land or property purchase, construction material and labour costs, infrastructure services, etc.

Developer finance can generally be raised against most types of property development, including commercial, residential, and mixed-use. Properties can be new build or renovations, for sale or for rent – but definitions of refurbishment may vary from one lender to another, with different limits available for heavier renovation.

Traditional development finance requires standard construction methods, like brick-and-block or steel and timber frames, but alternative construction methods like MMC (Modern Methods of Construction) – such as modular housing – may be considered.

Contact us for more information on how you can use development finance with us at ABC+.

Though they obviously sound similar, development finance and development exit finance are not the same thing. The former provides funding for construction or renovation projects from the start of the development, while the latter is used to finance the move from one stage of finished or almost complete development plans to the next.

Development finance loans are calculated to cover various stages of the development over a longer term, while exit finance typically provides a smaller short-term loan that can be applied in a few different ways. For example, to repay the initial development loan or allow an early equity release, or as a type of bridging loan to cover the gap between the end of the development phase and the property sale.

Here at ABC+ Architects Certificate, we can assist with both types of finance, as well as bridging loans. If you are specifically interested in development exit finance, please visit our dedicated page for more information on developer exit finance.