Ground-up development finance funds a new-build project from land acquisition through to practical completion. Rather than releasing the full loan at once, funds are drawn down in stages as the build progresses, keeping interest costs proportionate to what’s actually been spent and giving the lender confidence at each phase.
We work with specialist development lenders who understand construction risk properly, rather than generalist lenders trying to fit a build into a standard mortgage-shaped box.
| Measure | Unsecured Business Loan | Secured Business Loan |
|---|---|---|
| Loan to Gross Development Value | Often up to around 65% | Loan sized against the value of the finished project |
| Loan to Cost | Often up to 90% of build costs | Loan sized against what the project actually costs to build |
| Drawdown structure | Released in stages against valuer sign of | You draw funds as work is completed, not all upfront |
| Typical term | Usually 12 to 24 months | Matched to the expected build and sales programme |
These are typical industry ranges rather than fixed figures. The actual terms available depend on your experience, the project’s location, the strength of the appraisal, and which lender you’re working with.
We compare terms across a panel of specialist development finance lenders, including:
Each lender has a different appetite for scheme size, location, and developer experience, which is why comparing across the market properly matters for a project of any real size.
A developer who’d previously completed single-unit projects wanted to take on a six-unit scheme, a step up in scale. We arranged development finance sized against the gross development value, with staged drawdowns tied to a schedule of works agreed with the lender’s monitoring surveyor, giving the developer room to manage cash flow properly across a larger build.
A landlord with several buy-to-let properties wanted to move into ground-up development for the first time, building two houses on a plot they already owned. Given the lack of development track record, we structured the application around a strong appraisal and a clear exit onto sale, along with a modest contribution of the developer’s own funds, which was enough to secure terms from a lender willing to back a capable first-time developer.
Gross development value, often shortened to GDV, is the expected total value of the finished project once complete, whether that’s the sale value of the units or, in some cases, their letting value. Lenders size their loan against this figure, alongside the cost of getting there.
Yes, though it usually means a stronger appraisal, a clearer exit strategy, and sometimes a larger contribution of your own funds. See our Land Finance page if you’re still at the stage of securing the site itself.
Most lenders appoint a monitoring surveyor who visits the site periodically and confirms work has been completed to the expected stage before releasing the next drawdown. This protects both you and the lender against overpaying against unfinished work.
This is where your exit strategy matters. Some developers plan to refinance onto a bridging or buy-to-let facility if sales take longer than expected, buying time without the pressure of expensive development rates continuing indefinitely. We’ll help you think through a realistic contingency before you commit.
