Build it
Build it
Development finance
Ground-up, conversion and part-built schemes, from site purchase to exit.
See all →
Development finance
Which cap binds, loan to cost or loan to GDV, and the real day-one equity.
Build to Rent development
Underwritten on stabilised yield and DSCR, not sales rate.
Mezzanine and stretched senior
The gap between senior LTC and what you can fund, and the true blended cost.
Heavy refurbishment and conversion
Where refurbishment stops being a bridge: structure, change of use, drawdowns.
Part-built and rescue finance
Valuing an unfinished asset when the contractor has gone.
Bridge it
Bridge it
Bridging finance
Short-term debt where the deadline, the asset or the exit will not wait.
See all →
Purchase bridge
Completing before the money is in place: chain breaks, tight deadlines, unmortgageable stock.
Development exit finance
Off development debt at a lower rate, to buy sales time and release equity.
Auction finance
A 28-day clock, and what must be in place before the hammer falls.
Pre-planning and planning gain
Lending against current value with planning upside.
Below market value purchase
Day-one lending against open market value rather than price.
Second charge and capital raising
Raising against existing assets, and first-charge consent.
Light refurbishment finance
Bridge plus refurb tranche, and where the development boundary sits.
Also structuredBridge to let and refinance
Hold it
Hold it
Mortgages and term finance
Long-term debt against income, once the asset is built, let or trading.
See all →
Buy to let mortgages
ICR stress testing, limited company against personal, portfolio rules.
HMO mortgages
A higher cover test, licensing, and the two valuations a lender takes the lower of.
Commercial term, investment
Tenant covenant and lease term, and why DSCR sets the loan.
Commercial term, owner-occupier
Trading accounts and EBITDA rather than rent roll.
Portfolio refinance
Cross-collateralisation, and one facility against individual loans.
Stabilisation and term refinance
The income test replacing the GDV test, and the letting void before term debt engages.
Co-living and PBSA
An operational asset valued on income, and the operator covenant.
Run it
Run it
Business finance
Funding the business behind the property, secured on the ledger, the equipment or the covenant.
See all →
How we work
Case studies
Articles
Tools
Development finance calculator
Size the facility against site cost, build cost and GDV.
Development exit calculator
Refinance the development facility and release equity at PC.
Bridging finance calculator
What a bridge costs, and what actually clears on day one.
Refurbishment finance calculator
Fund the purchase and 100% of the works, with interest rolled to exit.
BTL rental cover calculator
The rent a buy to let must achieve to clear a lender's cover test.
Commercial mortgage calculator
What a commercial property's income will support, and what it costs.
About
Enquire now
Build it › Development finance
A development facility is sized by two tests at the same time. Loan to cost measures the loan against everything the scheme costs to build. Loan to gross development value measures it against what the finished scheme sells for. A lender applies both and advances whichever produces the lower number.
Most developers size a scheme on one of them, usually loan to GDV, because it is the one quoted in headline terms. Then the offer arrives lower than expected and the equity requirement moves at the worst possible moment, after a valuation has been paid for and a site has been tied up.
The second thing that moves is what the facility actually pays for. Arrangement fees, monitoring, professional fees and rolled interest all sit inside the loan. A facility that looks like it covers the build does not, once those are deducted. What is left after both tests and all the costs is your day one equity, and that is the number worth establishing before anything else happens.
Put the site cost, build cost and GDV in and see which cap binds.
We model both caps, not the flattering one
Every appraisal we build runs loan to cost and loan to GDV side by side and names the binding constraint. If the answer is uncomfortable, it is better to know at appraisal than at offer.
Fees and interest inside the facility
Rolled interest compounds across the programme. We show the facility gross, the deductions, and the money that actually reaches site, because those are three different numbers.
Contingency priced off the right base
Contingency belongs on hard build cost, not on total cost, and not on a habit. Priced off the wrong base it understates the requirement, which surfaces as a funding gap halfway through the build.
Drawdowns that keep pace with the build
The monitoring surveyor signs off work done before money is released. We manage that relationship so valuations keep up with the programme rather than lagging it.
Which lenders play here
High street banks at the conservative end, challenger banks in the middle, and specialist lenders where leverage or complexity rules the others out. Where the senior loan falls short, mezzanine or a stretched senior loan can take you up to 90% of cost.
60%
High street, max LTGDV
65%
Challenger, max LTGDV
75%
Specialist, max LTGDV
90%
Max loan to cost
Indicative, and not an offer. What a lender will actually do depends on the scheme, the borrower and a full valuation.
What to have ready
Bring these and we can tell you where you stand.
Each one is something a lender will ask for. Having it early is the difference between a fast answer and a slow one.
✓A costed appraisal, or the site price, build cost and GDV to build one
✓Build cost breakdown, ideally a tender rather than a rate per square foot
✓Planning consent, and any conditions still to discharge
✓Programme, with the drawdown profile you expect
✓Track record, including anything that did not go to plan
✓Exit evidence: comparable sales, or a refinance route and who would provide it
Related case study
£4m Development Loan for Salston Manor Residential Scheme
Related
Worth reading on this
Article
Free Development Finance Calculator & Loan Appraisal Guide
Article
How to Fund a Build to Rent Development Finance Scheme
Article
Are You Funding Ready? (+free development finance checklist)
Next
Related in this pillar.
Mezzanine and stretched senior
The gap between senior LTC and what you can fund, and the true blended cost.
Heavy refurbishment and conversion
Where refurbishment stops being a bridge: structure, change of use, drawdowns.
Part-built and rescue finance
Valuing an unfinished asset when the contractor has gone.
Common questions
The questions this product raises.
Why is the loan offered lower than the headline percentage?
A lender runs two main tests, loan to cost and loan to GDV, and lends the lower. It also limits the first advance, usually the land purchase, by how much it will lend against the site, which sets the equity needed at completion. Headline terms quote the GDV figure, so these catch people out. Which one binds depends on the scheme, and a costed appraisal shows it.
Why doesn't the facility cover the whole build?
Fees and interest sit inside the loan: arrangement fees, monitoring, professional fees and rolled interest, which compounds across the programme. So the facility gross, the deductions and the cash that reaches site are three different numbers. What is left after the lender's tests and those costs is your day one equity.
How much contingency will a lender want?
In the end it is the lender's monitoring surveyor who decides what is appropriate. On the main build contract, expect a contingency to be needed. For the other costs, such as prelims and professional fees, a lender is unlikely to ask for one where the figures are fairly firm and fixed. We often model one anyway early on, while those costs are still estimates. The firmer your quotes, the less the surveyor tends to ask for.
How does the lender release the build money?
In arrears, against work that has already been done. The lender's monitoring surveyor inspects and signs off the work before each release. That means you need the cash to pay for each period's work before it comes back to you. It is often about a month's worth, though not always. The cash can come from your own equity or from the day one release against the land, depending on the structure. Keep the programme in step with what is on site, so a release is not held up waiting for the surveyor.
Bring us the detail.
Send what you have. We will tell you what is fundable and what needs work before anyone approaches a lender.
Specialist property finance for developers who want the numbers to survive underwriting.
020 4572 4266LinkedIn
Fundingwise Limited is not authorised or regulated by the Financial Conduct Authority, and arranges unregulated finance only. That means lending secured against commercial property, or against residential property that is not, and will not be, occupied by the borrower or an immediate family member as a main residence. We do not advise on or arrange regulated mortgage contracts or regulated bridging loans. Because this finance is unregulated, FCA conduct rules and access to the Financial Ombudsman Service do not apply. Fundingwise Limited is registered in England and Wales, company number 13750788.