- Who it's for
- UK Ltd companies and LLPs delivering a defined build, conversion or heavy refurbishment project
- Typical amounts
- Up to £1,000,000 through this service; larger schemes need a specialist conversation
- Typical terms
- 6 to 24 months, aligned to the build programme
- Minimum turnover
- £100,000 a year to use Lending Box
- Security
- A legal charge over the site and development; property is at risk if the project or repayments fail
Indicative only. Subject to lender assessment and approval.
Who it's for
- Developers and builders undertaking ground-up new build schemes.
- Businesses converting a commercial property into residential units, or vice versa.
- Companies carrying out heavy refurbishment that goes beyond a typical bridging loan's scope.
- Experienced teams with a realistic build cost plan, programme and exit (sale or refinance onto a term mortgage).
How it works
- 1You provide the scheme details: site, planning status, build costs, programme, and projected end value (GDV).
- 2The lender assesses the costs, your experience and the exit plan, often alongside an independent monitoring surveyor.
- 3Funds are released in stages as the build reaches agreed milestones, verified by the surveyor, rather than all upfront.
- 4The loan is repaid once units are sold or the completed scheme is refinanced onto a standard mortgage.
How staged drawdowns work
Rather than releasing the full loan upfront, development finance is typically drawn in stages as the build progresses.
- An initial drawdown may fund site purchase or early costs.
- Further drawdowns are released against completed work, often verified by an independent monitoring surveyor.
- Interest usually only accrues on funds actually drawn, not the full facility, which helps manage cash flow during the build.
What lenders assess
Development lenders look closely at both the numbers and the team delivering the project.
- The build cost plan, checked for realism against the programme and contingency allowed.
- The projected gross development value (GDV) and the loan-to-GDV ratio, often capped around 60–70%.
- The developer's track record — experienced developers typically access better terms than first-time ones.
- The exit: confirmed demand, pre-sales, or a realistic refinance plan once the scheme completes.
Risks to weigh up carefully
Development projects carry genuine risk, and it's worth being realistic about these before committing.
- Build cost overruns or delays can strain the facility and the business's own cash reserves.
- A softer sales market at completion can affect the exit plan and repayment.
- Planning conditions or unexpected site issues (ground conditions, for example) can add cost and time.
- A realistic contingency in the cost plan, and a credible fallback exit, both matter considerably.
How a broker helps
Development finance lenders vary enormously in appetite, by scheme size, location, sector and developer experience. As a whole of market broker, we help present the scheme clearly and match it to lenders genuinely active in that space. For larger or more complex schemes, we'll arrange a direct conversation with a specialist rather than relying on general figures. Our service is free to your business; we're paid a commission or finder's fee by the lender if finance completes, as set out in our Broker Terms.
Eligibility
- A UK limited company or LLP (not sole traders or partnerships).
- Annual turnover of at least £100,000, or a demonstrable development track record.
- Planning permission in place, or a credible path to obtaining it.
- A realistic cost plan and programme, ideally reviewed by a quantity surveyor.
- Directors willing, in most cases, to give a personal guarantee.
Documents you'll need
- Planning permission documents and drawings.
- A detailed build cost plan and programme.
- Evidence of experience: previous completed schemes, if available.
- An appraisal showing projected gross development value (GDV) and costs.
- Latest accounts and bank statements for the company.
Advantages
- Funds released in stages matches cash flow to the build programme, rather than paying interest on undrawn funds.
- Can fund both the purchase of a site (in part) and the build costs, depending on the lender.
- Specialist lenders understand development risk and can structure around a realistic build programme.
- Successfully completed schemes can build a track record that supports larger facilities on future projects.
Things to weigh up
- The site and development are at risk if the project runs into cost overruns, delays, or a weaker sales market.
- Monitoring surveyor fees and drawdown processes add administrative work compared with a simple loan.
- Rates and fees are generally higher than standard commercial mortgages, reflecting construction risk.
- Inexperienced developers may find the market more limited, or need to bring in an experienced partner.
Worked example (illustrative)
A small building company plans to convert a disused commercial unit into four flats, with a projected gross development value of £800,000 and build costs of £350,000 including contingency.
A lender offers development finance covering around 60% of costs, released in four stages as works complete, verified by a monitoring surveyor, alongside the company's own capital contribution.
Using an illustrative blended rate of around 10–11% a year on drawn funds over an 12-month programme, total interest might be in the region of £20,000–£25,000, depending on how quickly funds are drawn. The real figures depend entirely on the lender's assessment and the scheme's progress — larger schemes always need a specialist conversation.
Property & secured calculator
Total interest (retained)
£17,100
- Maximum available
- up to £200,000
- Amount shown
- £150,000
- Rate
- 0.95% a month
- Repay at the end
- £150,000
Maximum is up to 70% of the property value, less existing mortgages or charges. Bridging interest is usually retained (taken from the loan upfront), so there are no monthly payments.
Illustrative only. Indicative only. Subject to lender assessment and approval.
Frequently asked questions
Related guides
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Lending Box helps UK businesses access business finance, working directly with businesses and their trusted advisers. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 or over, and terms and conditions apply. Guarantees and indemnities may be required. Lending Box can introduce applicants to a number of providers based on each applicant's circumstances and creditworthiness. We can also make insurance introductions. Lending Box will receive a commission or finder's fee for arranging such finance and insurance introductions. Broker Terms