Development finance eligibility: what you need
To qualify for development finance you typically need: property development experience (at least 1 to 3 completed projects), planning permission (or strong evidence it will be granted), a detailed build cost schedule, a realistic GDV supported by comparable evidence, and 10% to 25% cash equity in the project.
Experience requirements
Most lenders require evidence of at least 1 to 3 completed development projects of comparable scale. First-time developers can access finance for smaller schemes (typically under 1M GDV) if they have a professional team (architect, project manager, QS) and accept lower leverage. Greater experience unlocks better rates and higher LTC ratios.
Planning and project criteria
Full planning permission is usually required before drawdown. Some lenders will issue terms subject to planning being granted. The project must have: a clear build schedule, detailed cost plan (ideally QS-verified), realistic timescales, and a viable exit strategy (pre-sales or open-market sale).
Financial requirements
Developers typically need 10% to 25% cash equity in the project. This can be the land value if purchased previously, or cash deposit. The project must demonstrate a reasonable profit margin — most lenders want to see minimum 15% to 20% profit on cost. Personal guarantees from directors are usually required.
Key documents needed
Documents include: planning permission and approved drawings, build cost schedule (QS report preferred), comparable evidence supporting GDV, professional team details (architect, contractor, project manager), borrower CV showing completed projects, company accounts (if applicable), site photos, and solicitor details.
Strengthening your application
To get the best terms: present a clear and detailed development appraisal, have all professional team members appointed before applying, obtain planning permission rather than applying subject to planning, provide strong comparable evidence for GDV, and include contingency (5% to 10%) in your build costs.
FREQUENTLY ASKED
Frequently asked questions
It is possible but more limited. First-time developers can typically access finance for smaller projects (under 1M GDV) with lower leverage (60% to 65% LTC). Having an experienced project manager or contractor on board helps significantly. Some lenders have specific first-time developer programmes.
Most lenders want to see a minimum 15% to 20% profit on total cost. This provides a buffer for cost overruns or market movement. Projects with thinner margins may still be funded but at lower leverage to protect the lender position.
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Results are indicative and depend on lender criteria, valuation, security, credit profile, exit route and full underwriting.
Results are indicative and depend on lender criteria, valuation, security, credit profile, exit route and full underwriting. Commercial finance may be unregulated. Some property finance can be regulated depending on borrower, property use and loan purpose.