100% UK Development Finance For Property Developers 
Our lenders provide 100% UK development finance which is also known as joint venture or (JV). Joint venture property development finance is a method of developing property without using your own money as the funder will provide the funding in exchange for a part of the profits.
As the lender provides all of the money needed to complete the project, profits are usually shared on the sale of the full site or on the sale of the individual sale of the properties which is usually houses and apartments.
Generally speaking, the profits usually end up split on a 50/50 basis through 100% development financing. Some lenders will charge interest on funds drawn down and a profit split in your favour slightly. Others will charge no interest and simply split the profits 50/50.
Where interest is charged on the debt, it is usually allowed to roll up, meaning there is no need to service the debt. JV development finance is designed to cover 100% of all purchase and build costs of the project. This means that site acquisition and build costs are both covered fully by the lender.
It’s challenging for a developer with a site in-mind but not enough cash in-hand to get the finance and partners they need, while making life-defining decisions. Bring your wealth of experience and a profitable development to get the partners you need with the attention of our JV funders who will help you finance your development.
Fully Funded 100% Development Finance
Our lenders will fund 100% of all build costs including ALL professional fees.
Indicative terms will be produced within 24 hours and assuming no material information changes, we will honour those terms.
You will always speak to a decision maker to ensure you do not waste your time and because we are not at the behest of external funders, once a decision to lend is made, we stick by it.
Raising 100% Development Finance
One hundred per cent property development finance or investment finance is a 100% finance facility tailored and provided to a sponsor that needs to raise almost the whole amount of finance to realise the project.
There are different options to raise to 100 per cent development finance. The first one is the common one with additional security; this option allows the sponsor to raise the funding needed by providing other assets (usually with the first charge on behalf of the lender) in addition to the existing project.
Other options include a joint venture (JV) partnership, private equity investment, structuring debt as equity piece and restructure the whole deal with a combination of some types of finance.
Our experienced team analyses the project or the property deal and offers the sponsor the best options to realise the transaction.
100% Development Finance Highlights
- UK mainland only
- 100% development finance
- Funding for all costs land & build
- No valuations
- No personal guarantees
- Funding from 1% PCM
- True 50/50 Profit share
100% Finance Options
Build Partner
A full 100% debt and equity package with interest charged on funds drawn and profit share with borrower after total GDC (including finance costs). Security held in a subsidiary with a Joint Venture (JV) agreement with the borrower. No PG’s required by the borrower for 100% UK development financing.
Equity Partner
True 100% funding option, providing the borrowers contribution towards the purchase costs secured by a 2nd charge behind any reputable senior debt provider. Interest charges replaced by a profit share with the borrower after total GDC (including finance costs).
Joint Venture
A true JV offering for deals over £10mil GDV. Typically, major inner-City developments of multi-unit apartment schemes sold overseas off plan.
Eligibility
- UK mainland only
- Experienced Developers
- New build or conversion traditional, timber or modular build
- Project length max 15 months
- Full planning detailed planning permission
- Middle of the market property
- No valuation required
- Local knowledge
- 27% return on GDV
Joint Venture Development Finance Benefits
Working with a JV development finance lender instead of using your own funds allows you to develop quickly without having to tie up your capital. By taking this route, although profits are shared, more projects can be taken on, meaning your potential profit can actually grow. Where projects are located nearby and locally savings can be made by sharing resources between your sites.
Joint Venture Development Finance And Their Assesment
Joint venture property development lenders are taking all of the financial risk on the application and will want to see a reward for doing so. As such, applications are subject to strict underwriting on the following basis:
- Experience: This is essential as lenders want to ensure you have a track record of delivering development schemes you are looking to build out.
- Profit: Funders will assess the likely profit in two ways:
- Firstly, they will judge the uplift in total cost of at least 25% for the scheme to be viable. It goes without saying, but the higher the margin, the more attractive the proposal.
- Secondly, potential JV partners will generally only get involved in sites with a GDV over £1m. Sites above £2,000,000 tend to be the most attractive due to the increased potential profit.
- Exit: Another key point is exiting the loan. Demand must be strong for the finished units. Your scheme must be able to demonstrate saleability. Location of the site tends to go hand in hand with this point.
What Documents Are Required For 100% JV Financing?
In order to assess a potential application, our lenders will need to see the following:
- A fully completed faxt find and development information
- Your CV of previous developments
- A detailed schedule of works.
- A detailed schedule of costs.
- Full copy of planning permissions (or a link to the planning portal showing permissions).
- Detail around the end value of the scheme or GDV
Frequently Asked Questions:
Do I have to invest any of my own money?
No, our lender provide 100% of the funding for every profitable property development and investment you find in the UK.
Do I need to live near my project?
Ideally, being that you’ll be the lead property developer or house-builder responsible for delivering the project, we recommend that you live within a 50 mile radius of any proposed project.
As the property developer or housebuilder what’s my profit share?
You will receive up to 50% of the profit due from the project, be it sale, rental or business income without putting any of your own money in. We do not charge interest on equity; only the senior debt and mezzanine debt facilities charge interest on a utilisation basis. Your minimum share of the profit is 40%.
Am I able to put money in as the property developer?
Yes, you’re able to put in capital towards your project which would result in your shareholding increasing. You’re able to do this via our equity platform once the project is available for funding.
Will you invest in properties without planning permission?
Ideally, we like to stick to opportunities that have planning permission or permitted development rights. If planning is due to be issued (application submitted and validated), we will also look at it and potentially approve subject to the planning permission being issued
What happens if there are any delays to a project?
We appreciate there can be delays in the world of property development. Some won’t be in your control, whereas some will. Typical delays can be caused by delays in planning conditions being submitted, detailed designs not being issued, poor procurement schedules, and programmes not being kept to.
We help to mitigate those by overseeing the programme from start to finish, though as the property developer or housebuilder the onus is on you to do the work. Should we feel there is neglect being applied, we serve you with a rectification notice which gives you 4 weeks to rectify the issue. Ultimately, everything is in your hands.
To provide some guidance, this is why it’s vitally important to select a competent and experienced professional team that’s not made up of one man bands. We assist you from the outset in making sure the correct professional team has been selected and all for market prices.
What Are the Main Development Finance Costs In A Normal Development Finance Case?
Fees, charges and general borrowing costs vary significantly from one lender to the next. The following will apply in most instances as the primary costs of development finance:
Facility fee – More commonly referred to as an arrangement fee, the facility fee is calculated as a percentage of the total cost of the loan (gross or net).
Interest rate – Interest on a development finance loan can be charged on an annual or monthly basis. Annual interest rates of 7% are not uncommon, as are monthly interest rates of 1%. Longer-term facilities attach lower rates of interest, though cost more than those that are repaid quicker.
Exit fee – Sometimes called a completion fee, the exit fee is usually calculated as a percentage of the total cost of the loan (gross or net). Some lenders charge a percentage of the total value of the completed project – not the sum borrowed.
Broker fee – Some brokers offer their services free of charge for customers, receiving commissions from lenders upon successfully referring customers. Some brokers impose a fixed fee for their services or charge a percentage of the total value of the loan.
These are just some of the primary costs to take into account when considering development finance. Working with an independent broker will help ensure you gain access to the best possible deal to suit both your requirements and your budget.
At Platinum Global Bridging Finance, no broker fee applies on facilities of £500,000 or above. Where a fee applies on smaller facilities, you will be informed of this clearly in our initial quotation.
Other Development Finance Costs to Take Into Account
Additional development finance costs to take into account (which may or may not be applicable) include the following:
Valuation fees – It will usually be necessary for an initial valuation to be carried out by a neutral third party, in order to assess the open market value of the security. This will also typically include a projected valuation of the completed project.
Application fees – Platinum Global Bridging Finance does not charge application fees. Some lenders and brokers impose fees simply for submitting an initial application, or seeking advice on development finance.
Legal fees – If it becomes necessary to hire a solicitor or seek qualified legal advice, the applicant will be responsible for meeting all such costs accordingly.
Administration fees – This is a somewhat vague term, which can apply to almost any additional cost imposed by the lender. Some brokers also charge administration fees – Platinum Global Bridging Finance does not.
Monitoring fees – Development finance lenders will naturally need to monitor the progress of the project, in order to ensure it is reaching its predetermined goals. This is to make sure their investment is sound, and the funds allocated are being used as agreed. All monitoring fees are picked up by the borrower.
Draw down fees – Each time a new instalment of funds is transferred to the borrower, an additional fee known as a draw down fee may apply. This could be a set fee, or charged in accordance with the size of the instalment.
Telegraphic Transfer fee (TT Fee) – This is a cost imposed by the banks handling the money transfers, which in the case of development finance can be comparatively large. Nevertheless, TT fees are generally quite small and charged at a fixed rate.
The Development Finance Process
Development finance is always tailored to the requirements of the borrower and the specifics of the project. There are several key stages of development finance that remain relatively constant, which are as follows:
- Initial enquiry and obligation-free consultation
- Comparison of deals from specialist UK lenders
- Submission of initial application to suitable lenders
- Agreement in principle issued to the borrower
- Site visit to establish the project’s viability
- Independent valuation of the project’s total value
- Formal loan offer and final terms
- Solicitor involvement for legal support and advice
- Completion of the loan and first payment (drawdown)
- On-going instalments to fund the project
- Repayment of the loan as agreed at a later date
Obtaining Property Development Finance
Regardless of where you are in the overall scheme of things, finding a suitable source of development finance is one of the last things that you want to be worrying about. You will no doubt have enough on your plate with the day to day running of things making sure everything is going according to plan and that everyone is pulling their weight whilst carrying out their delegated tasks appropriately as you head towards your end goal.
In terms of usage, property development finance may be required for anything ranging from new build residential projects, mixed use buildings, strictly commercial developments through to the purchase of existing land or buildings which need to be refurbished to an exact specification within a set timeline. It can either be arranged outright at the beginning of the project or halfway through a building development and it is typically paid out in increments at varying points towards completion.
When applying for development finance the main considerations on the lender’s behalf are the assets you are able to offer as security and your ability to show how feasible the project is. The lender will also require additional information including how long the project will take to finish, the end value and a breakdown of all of the costs involved, including reasonable allowances for any unexpected or incidental expenses which may incur.
Once you are able to show that your project is worthy of investment in terms of economic viability and profit margin, you will also need to prove that you have the relevant planning permission and the experience to get things completed. If your own experience is somewhat limited then this is not usually too much of a problem as long as the people who are working for you have a proven track record with good credentials. This will include everyone ranging from the architect, your chosen project manager through to the actual builders themselves who you will ideally be employed under a fixed price contract in order to provide peace of mind for both you and the person who is lending the funds.
With this in mind it is absolutely vital that you find a property development finance broker that is highly experienced with access to a wide and varied panel of lenders experienced in providing development loans. Investors who are open to participating in any type of property development project regardless of size, scale or predicted time frame.
Development Finance: The Challenges
Visibility
Opening up the market brings more choice, and options are always a positive, but poor visibility within the market poses a real challenge. Many developers simply aren’t aware of the breadth and depth of non-bank lenders that exist, or lack the relationships to access the key decision makers within those organisations. Poor transparency and limited marketing from smaller lenders mean that credible, alternative lenders with large and flexible lending funds are often missed, along with the opportunities they offer.
Credibility
Most developers can identify around five lenders, when in reality there are many more options. It is, however, important to be cautious. A number of new lenders have entered the market in recent years, so it’s worth understanding how a lender is funded and whether their backers are likely to withdraw funding lines at the first sign of trouble. If the leverage offered seems higher than the rest of the market, or a rate seems too good to be true, it’s essential to work with trusted, established lenders.
Choosing Your Lender
To maximise equity, mobilise quickly, and get ahead in the property development game, borrowing from the big UK banks isn’t always the most viable option. Rates may be low, but deposits are large — meaning developers can end up paying away profit shares or limiting themselves to smaller sites. Working with a broker with the right expertise, knowledge, and relationships to navigate the market can help mitigate risk and identify the lender that’s right for a specific project.
The Capital Stack
The capital stack is the structure of your development finance — the different layers that fund a scheme. The typical stack has three layers: senior debt, mezzanine debt, and equity.
Need to know:
- Debts are repaid from the bottom up, so the higher up the stack a lender sits, the greater the risk they carry and the more expensive their debt.
- Equity sits at the top of the stack, followed by mezzanine (second charge), with senior lending (first charge) at the bottom.
- Lenders will want visibility of the full capital stack to understand where they sit in the hierarchy of funding.
- This lets them assess the potential return relative to the level of risk.
In practice:
- Not all lenders require a large deposit, so it’s worth shopping the market rather than defaulting to a familiar lender in order to preserve equity for longer.
- Deposit requirements typically range from 10% to 35%. On a development with £10m of costs, a deposit could vary by as much as £2.5m — a substantial opportunity cost in lost equity between a 10% and a 35% deposit requirement.
- Where a lender requests a large deposit, bringing in an investor on a profit share basis is one option, but this can prove a false economy.
- Experimenting with different loan structures can help avoid hefty profit share payments.
Personal Guarantees
A personal guarantee is a legal promise to repay loans issued to a business where you are a beneficial owner. Providing a personal guarantee means that if the business becomes unable to repay a debt, you accept personal liability rather than being able to walk away.
Personal guarantees are standard practice in development finance and are typically required from all shareholders, or provided as a corporate guarantee. The industry average is 15% to 25% of the total loan amount. Generally, the higher the LTGDV, the higher the personal guarantee required. Lenders usually want roughly double the cover on a personal guarantee amount — so a £1m guarantee would typically require evidence of a Net Asset Value (NAV) of more than £2m.
Need to know:
- Liability is usually joint and several, so if two of three shareholders are unable to pay, the remaining shareholder can be responsible for the full amount, not just their proportional share.
- Personal guarantees are not charges over specific properties. Borrowers typically submit an Asset and Liability (A&L) schedule during the application process, and the lender assesses whether there is sufficient equity value to cover the guarantee.
- Personal guarantees can be secured against both liquid assets and property assets (property is generally preferred, as cash is easier to move).
- Equity in a main residence can count towards the NAV, though lenders may discount this given it is harder to realise in the event of a claim.
- The lowest level of personal guarantee typically covers cost overruns only, and is usually reserved for loans with a lower LTGDV and/or a performance bond in place.
In practice:
Personal guarantees are a form of alignment between lender and borrower rather than a primary source of security. Lenders don’t expect to enforce them and generally only do so as a last resort — but they exist in case a project runs into serious difficulty. A typical sequence would be: first, drawing on the contingency built into the loan; then, if needed, requesting additional funding from the lender (which may be declined if the facility is already at its leverage limit); then meeting any further shortfall from liquid assets; and, only as a last resort, the lender looking to enforce the personal guarantee through the courts.
There are ways to reduce a personal guarantee requirement, including increasing the contingency built into the loan (the industry standard is around 5% of build costs), lowering the LTGDV below 50% (some lenders will make exceptions at this level), offering a cash deposit as an alternative or supplement, or arranging a performance bond through the main contractor.