What is Development Finance?

Development Finance is used by property developers to build, convert or renovate a property or development of any size. Such facilities can cover the purchase (or refinance) of the site or property, in addition to 100% of build costs, plus interest and fees.



How much can I borrow?

There are many options when it comes to development finance. We have options that include 100% funded Joint Ventures and in contrast we have options from the High Street banks offering lower loan amounts (in percentage terms) at low rates. It’s fair to say the higher the perceived risk by the lender, the higher the cost.

On a typical Senior Debt deal you can borrow the lower of 65% of the GDV, or 80% of Total Project costs.

For a Stretched Senior deal, its 75% of GDV or 90% of costs.

Our analysts will explore the proposal for you and come up with the best options for your development & circumstances.

How long can I borrow it for?

Terms can be from 6 months to 48 months, dependent on how long it will take to build and then sell the units. Often the lender will add 6 to 12 months on to the proposed build programme, to allow sufficient time for sales.



What rates and fees will I have to pay?

Varsity Finance will search the whole of the market and get you the best deal we can. The rate we expect to achieve will be presented very early in the analysis stage.



Do I need to give Personal Guarantees (PG)?

Not always. We have facilitated many deals for clients where PGs are not needed.



Do I need experience?

Not necessarily. Experience will open up a wider range of options, but we still have many options for clients with no experience.



How do I apply for development finance?

To give you an initial indication of the funding options available to you, we would usually need a Development Appraisal and Cash Flow, a copy of the Planning Permission and details of your experience.

To present you with a reliable “In Principle” decision, we will need a full pack of information to complete the application and this will include, inter alia:

  • CV’s (or similar) for the Borrower(s), to include details of any previous developments undertaken
  • Personal Asset and Liability Statements for the Borrower(s)
  • Company details, if applicable
  • Copy of Sales Particulars or Valuation, if available
  • Planning permission details
  • Land registry title number for the land/ property
  • Financial appraisal
  • Confirmation of number of units, storeys, square footage and number of bedrooms in each property
  • Detailed build costs & cash-flow
  • Contractors’ details
  • Details of any section 106 agreement (if applicable)
  • Any information which may support the estimate of Gross Development Value
  • Solicitors’ details

Can I borrow in a limited company?

Yes. Many developers set up Special Purpose Vehicles or “SPV’s” for each development. You can also borrow as an individual, partnership, LLP, Limited company or even an overseas company.

Varsity Finance are experts at finding the right type of development finance for.

The majority of development finance will be used on new house and apartment projects, but it can also include commercial units, mixed-use transactions (e.g. a retail unit on the ground floor of a building with apartments being developed above) and larger scale conversions, (e.g. an office building being converted to apartments).

The current market in development finance is growing strongly and the scope of our lender panel is such that we can consider first-time developers, development locations throughout the country, high-end single units or large multi-unit schemes.


To speak with a specialist adviser please call us on 01223 627999

Varsity Finance – NACFB Brokers

Commercial Finance is not regulated by the Financial Conduct Authority