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Navigating Property Development Finance: A Guide to Raising Funds for Your Project

27 September 2023
Mark Friend
Property Investors & Developers

Are you new to property development or a property developer wondering how to raise funds for your next project?

Navigating the world of property finance may seem like a daunting task but understanding the options available and how lenders operate can make the process smoother and more accessible.

In this article, we explore specialist lenders and their approach to financing property developments in the UK.

Asking the Essential Question: How to Raise Funds?

Every property developer faces the pivotal question:

How to effectively raise funds for a development project?

The answer lies in knowing the right channels to approach and understanding their lending criteria.

Exploring the World of Specialist Lenders

One of the most viable options for securing property development finance is approaching specialist lenders.

Unlike traditional banks, specialist lenders, or non-bank lenders, have a more flexible approach, tailored for property development projects.

What do Specialist Lenders Offer?

  • Tailored Solutions

Specific financing options designed for different types of development projects.

  • Flexible Terms

More adaptable loan terms and conditions, making it easier for developers to find a suitable financing solution.

  • Staged Funding

Release of funds in stages to align with the project’s development milestones.

Understanding the Lending Criteria

Based on Gross Development Value (GDV)

Specialist lenders often base their lending amount on the GDV, which is the estimated market value of the project upon completion.

  • Loan Amounts

Typically lenders might offer between 50% and 70% of the GDV. For example let’s say you bought a plot of land and could build 4 properties on the land, each with a potential sales value of £500K. Based on this your GDV would be £2m and a lender might offer £1m to £1.4m.

  • Factors Influencing the Lending Amount

Project viability, developer’s track record, location and project type.

Staged Disbursement of Funds

Funding is often released in stages as the project progresses:

  1. Initial Drawdown: Funds for initial costs released at the start (e.g., 10-15% of the total loan amount).
  2. Construction Milestones: Funds released upon completion of specific construction phases (e.g., 25% released upon completion of the foundation).
  3. Project Completion: Final instalment released upon project completion (e.g., remaining balance of the loan amount).

Monitoring and Verification

  • Regular Monitoring

Lenders monitor the project to ensure adherence to the timeline and budget.

  • Verification

Completion of each stage is typically verified before releasing funds.

Making it Work for You

Understanding the approach of specialist lenders is the key to successfully securing finance for your property development project:

  • Prepare Thoroughly

Have a detailed business plan, project appraisal and financial projections ready.

  • Understand the Terms

Ensure you fully understand the loan terms, including interest rates and repayment schedules. Set up fees and interest rates will be high but will offer flexibility as interest is only charged as and when the loans are drawn down.

  • Manage Cash Flow Effectively

Plan for the staged disbursement and manage your project’s cash flow accordingly.

How Friend & Grant Can Assist You

At this point, your mind might be teeming with questions and you might be looking for personalised guidance.

This is where Friend & Grant, Chartered Accountants, come into play.

Our team is here to aid property developers like you in navigating the financial landscape.

We offer:

  • Leverage Our Contacts

We can connect you with the right specialist lenders for your project.

  • Business Plan Preparation

Our experts will help you prepare a comprehensive and robust business plan to increase your chances of securing funding.

  • Setting Up Books and Records

We will ensure your accounts are in order, enhancing transparency and credibility.

  • Project Costing Assistance

We will assist in setting up the systems for detailed project costing, ensuring you have a clear financial picture.

  • Cash Flow Forecasting

Our team will help you manage and forecast your cash flow, ensuring you have the funds you need when you need them.


Navigating property development finance is complex.

Get the financing wrong and with project delays a healthy profit can quickly be eroded.

However with the right guidance and support from Friend & Grant, developers can effectively secure the necessary funding for their projects, bringing their visions to life with solid financial backing and increase their chances of financial success.

Reach out to us today and let us assist you in making your property development project a financial success.

Our Services

To read more about our services please see our related pages below:

Property Investors & Developers

Raising Finance for Business

Blogs related to Property Investment

Take a look at our other blogs on the topic of property investing:

Should I put my investment property into a limited company?

Is property still a good investment?


The content in this blog is correct as of 26th September 2023. See terms and conditions.

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