If you’re an aspiring or small-scale property developer or investor, understanding development finance could be the key to unlocking your next opportunity. Whether you’re planning to refurbish a run-down house, convert a commercial unit into flats, or start a ground-up new-build, securing the right property development loan can make or break your project.
At Sunrise Commercial, we help developers and property investors secure fast, flexible finance—so you can focus on the build, not the red tape.
What is Development Finance?
Development finance is a short-term funding solution specifically designed for property development projects, including:
- Refurbishments – light or heavy renovations to enhance or repurpose a property
- Permitted Development (PD) – conversions such as offices to residential under relaxed planning rules
- Ground-Up Developments – new-builds from foundations through to completion
Unlike standard mortgages, development finance loans are structured to fund the acquisition and the construction, with staged drawdowns and flexible repayment options.
Key Loan Terms at a Glance
If you’re targeting residential or semi-commercial projects within the M25, here’s what you can expect:
| Loan Feature | Details |
| Loan Type | First Charge Development Loan |
| Loan Size | £750,000 – £10 million |
| Max Loan to GDV | Up to 65% of Gross Development Value |
| Term | Up to 18 months |
| Interest Rate | From 0.75% per calendar month (fixed) |
| Arrangement Fee | 2% |
| Exit Fee | 1% |
| Legal & Valuation Fees | Panel market rate |
| Speed | Decision within 1 hour; funds in 5 days |
How Do Development Loans Work?
100% of Build Costs – Paid in Stages
Development finance is typically structured to cover 100% of your construction or refurbishment costs—but funds are released in stages, based on your project’s progress. This is known as tranche drawdown.
- Initial Loan Advance: Based on the purchase price or current site value
- Build Funds: Released in line with work completed (verified by a monitoring surveyor or QS)
- Final Exit: Repay via sale, refinance, or another exit strategy
Net vs Gross Loan Explained
It’s important to understand that the loan amount you receive is a net loan. That means:
- Fees (interest, arrangement fee, sometimes interest retention) are deducted upfront
- You receive less than the full gross loan amount into your account
- The gross loan is what you owe back at the end
Example:
If you qualify for a gross loan of £2 million, you may receive a net amount of £1.85 million after fees and retained interest. Always account for this when budgeting your project.
Eligibility Criteria: Who Can Apply?
Whether you’re a first-time developer or a seasoned investor, this finance is open to a range of borrower profiles:
- Experience: Helpful for larger projects or heavy refurbishments, but not mandatory
- Adverse Credit: CCJs, missed payments, even historic bankruptcies are considered
- Limited Companies & SPVs: Accepted, including offshore structures (with UK presence)
- No Credit Committees: Each deal is assessed individually for speed and flexibility
Special Note:
- On loans up to £3 million, the requirement for Monitoring Surveyor (MS) reports can be waived—saving time and costs.
Speed & Flexibility Are Key Advantages
In a competitive market, timing is critical. Here’s how this funding option helps you move quickly:
- No Credit Committee Delays: You can often get a decision within 1 hour
- Funds Drawn Down in 5 Working Days: Subject to valuation and legals
- Tailored Lending: Complex projects and unusual circumstances considered
Use Cases: What Can You Finance?
This development finance is ideal for:
1. Light or Heavy Refurbishments
- Converting a 2-bed house into a 4-bed HMO
- Upgrading kitchens, bathrooms, and wiring
- Full internal strip-outs or reconfigurations
2. Permitted Development Schemes
- Office-to-resi conversions under PD rights
- Class MA or Class G schemes
- Minimal planning risk, faster turnaround
3. Ground-Up Development
- Single unit or small housing schemes
- Apartments or semi-commercial buildings
- Brownfield or back-land developments
Why Use a Specialist Development Finance Broker?
At Sunrise Commercial, we don’t just introduce you to lenders—we represent your interests.
Here’s what we bring to your project:
- Tailored structuring to suit your cashflow and timeline
- Real development insight—our partners have overseen over £350m in GDV
- Access to exclusive lenders not found on comparison sites
- Fast communication, personal support, and no unnecessary delays
Whether it’s your first property project or your tenth, we’ll guide you through from application to exit.
Frequently Asked Questions
Can I use this finance to buy the site as well?
Yes, part of the loan is typically used for site acquisition, based on the current or purchase value.
Do I need to fund the build costs upfront?
No—you can receive 100% of build costs, released in drawdowns based on verified progress.
What’s the difference between LTGDV and LTV?
- LTGDV (Loan to Gross Development Value) = Loan / Estimated final value
- LTV (Loan to Value) = Loan / Current site value
Most development lenders focus on LTGDV for risk assessment.
Ready to Fund Your Property Development?
We help first-time developers, experienced landlords, and hands-on investors access the right finance to grow their portfolio and maximise profit.
📞 Call today for a no-obligation consultation: 07939 091418
📧 Or email us directly: john@sunrisecommercial.co.uk
🌐 Visit: https://www.sunrisecommercial.co.uk
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