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Development Finance: Everything you need to know...




Welcome to Approved Finance Group’s Comprehensive Guide to Development Finance! Whether you're an experienced property developer or a business owner stepping into the world of property development for the first time, this guide is here to simplify the process and answer your questions. Our goal is to demystify development finance, empowering you with the insights needed to make informed decisions and successfully fund your projects.



Table of Contents


  1. What is Development Finance?

  2. What is an Example of Development Finance?

  3. Can You Get 100% Development Finance?

  4. How Much Deposit Do I Need for Development Finance?

  5. How Much Can You Borrow with Development Finance?

  6. What Are the Benefits of Development Finance?

  7. Why Use Approved Property Finance?

  8. How Does It Work?



What is Development Finance?


Development finance is a specialised type of funding designed to support the construction or renovation of commercial properties. This form of finance provides developers with the capital required to cover:


  • Land Acquisition Costs: Securing the land needed for your project.

  • Planning Permissions: Covering fees and approvals.

  • Construction Expenses: Materials, labour, and other building costs.

  • Additional Project Costs: Legal fees, surveys, and project management.


Typically offered as a short-term funding solution (ranging from 6 to 24 months), development finance ensures projects remain on track from start to completion.



What is an Example of Development Finance?


Unlike conventional business loans or mortgages, development finance is disbursed in stages, aligned with the project’s progress. Here’s a practical example:


  1. Land Purchase: The first tranche of the loan is used to acquire the land, covering up to 70% of its cost.

  2. Construction Costs: Subsequent funds are released in phases to match project milestones, covering up to 90% of building expenses.


This staggered approach ensures proper risk mitigation for lenders while providing developers with the cash flow they need as the project advances.



Can You Get 100% Development Finance?


Yes, 100% development finance is achievable, but it is generally reserved for experienced property developers with a proven track record of successfully completing similar projects. Lenders evaluate:


  • Past Experience: Demonstrated success in comparable developments.

  • Project Feasibility: A solid plan with robust financial projections.

  • Collateral: Availability of additional security.


New developers or those pursuing smaller projects may find it more challenging to secure 100% funding. For these cases, consulting a broker can help identify tailored solutions.



How Much Deposit Do I Need for Development Finance?


Deposits for development finance typically range from 20% to 30% of the total project cost. However, the exact deposit amount depends on:


  • The specifics of your project, including its size and complexity.

  • The lender’s criteria and risk appetite.

  • Your experience and financial standing.


Engaging with lenders or brokers early in the planning phase can help clarify the deposit requirement and secure the best terms for your project.



How Much Can You Borrow with Development Finance?


The borrowing capacity for development finance is based on the Gross Development Value (GDV)—the anticipated market value of the completed project. Lenders typically offer:


  • Up to 60–70% of the GDV.

  • Up to 75–80% of total project costs.


This approach ensures adequate funding while minimising risk. Calculating your project’s GDV accurately is essential to securing sufficient financing.



What Are the Benefits of Development Finance?


Development finance offers significant advantages for property developers and business owners:


  • Capital for Growth: Provides the funding necessary to bring construction or renovation projects to completion.

  • Tailored Solutions: Financing can be customised to match your project’s unique requirements.

  • Cash Flow Management: Staged payments allow developers to maintain healthy cash flow throughout the project.

  • Versatility: Suitable for various property types, including offices, retail spaces, industrial units, and mixed-use developments.

  • Short-Term Funding: Designed for the project lifecycle, with repayment typically aligned to the sale or refinancing of the completed property.


By providing flexibility and access to substantial funding, development finance helps developers achieve their goals efficiently.



Why Use Approved Property Finance?


Approved Property Finance is a trusted partner for developers seeking hassle-free and transparent development finance. Here’s why clients rely on us:


  • Expertise: Years of experience in property finance ensure tailored advice and solutions.

  • Competitive Rates: Industry-leading terms and interest rates help maximise your return on investment.

  • Flexibility: Funding solutions customised to your project’s needs.

  • Reputation for Trust: Known for delivering reliable and efficient service, from initial consultation to final funding.

  • Transparency: No hidden fees or unexpected surprises—just clear, straightforward finance.


With our expertise, you can focus on what matters most: successfully completing your project.



How Does It Work?


Our process is simple, efficient, and designed with your convenience in mind:

  1. Initial Consultation: Share your project details, and we’ll outline financing options.

  2. No-Obligation Application: Apply without worrying about an impact on your credit score.

  3. Transparent Offers: Receive clear, competitive terms tailored to your project.

  4. Funding in Stages: Disbursements align with your project’s milestones for smooth progress.


At Approved Finance Group, we make development finance easy, so you can concentrate on turning your vision into reality.





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Copyright © 2025 Approved Business Finance Ltd. All rights reserved.

 

Approved Business Finance Ltd is an independent asset finance brokerage and not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent finance advisors and so are unable to provide you with independent finance advice. Approved Business Finance Ltd will receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. We will receive commission from our lenders. Approved Business Finance Ltd aims to provide our customers with the highest standards of service. If our service fails to meet your requirements, we will endeavour to find a resolution. 

 

Approved Business Finance Ltd is an Appointed Representative of AFS Compliance Ltd, which is Authorised and Regulated by the Financial Conduct Authority, firm number 625035. Approved Business Finance Ltd is a Franchisee of Asset Finance Solutions (UK) Ltd. Approved Business Finance Ltd is incorporated in England and Wales (company number: 11914104) with its office at Seebeck House, Seebeck Pl, Milton Keynes MK9 8FR

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