What is property development finance?

Published on: 03rd Sep 2021
in Featured | Guides | News

What is property development finance?

Property companies and developers use this type of finance to buy land, begin development, or to convert or refurbish an existing property.

Funds are advanced upfront initially as a short-term loan towards land purchase followed by draw-downs in staged payments for build works. Loans are calculated based on the predicted value of the property at completion with factors such as project type, developer experience, level of build cost, and equity taken into account.

Each stage release payment may be subject to sign off by an independent surveyor, working on behalf of the funder, to ensure the work is being done to a high standard and there is sufficient value in the site to release the next stage.

It’s very important to consider development finance with a strategic mind-set. By doing so, it can improve the financial status of your project, how each choice of product influences the outcome, and helps to define the structure of the case.

For more insight download our Development Finance Guide



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