How development finance works
Development finance funds ground-up builds and major conversions, typically advancing a percentage of land cost plus build costs, released in stages as the project progresses, and repaid on sale or refinance. The best facility matches your project's scale, your experience and a credible exit.
1. Ground-up development finance
For building from scratch on a plot. Best for developers with planning permission and a clear build plan — funds land and construction in drawdowns, with lenders assessing the gross development value (GDV).
2. Conversion and refurbishment development finance
For converting buildings (e.g. office-to-resi, house-to-flats) or heavy refurbishment. Best for developers adding value through conversion — see our renovation bridging guide for smaller projects.
3. Development finance for experienced developers
Experienced developers access higher loan-to-cost and better terms. Best for those with a track record — lenders lend more readily and competitively.
4. Development finance for first-time developers
Some lenders support first-time developers, often wanting a strong team (builder, project manager) and more equity. Best for newcomers with the right professional support around them.
What lenders assess
- GDV — gross development value on completion
- Loan-to-cost and loan-to-GDV ratios
- Planning permission and build costs
- Experience and professional team
- Exit — sale or refinance
How to find the best development finance
Development finance is specialist and bespoke. A business finance specialist can structure the facility and access lenders suited to your project and experience. Find a business finance specialist through Nesto — free, no obligation.
Frequently asked questions
What is development finance?
Funding for ground-up builds and major conversions, advanced in stages against costs and repaid on sale or refinance.
How is it released?
In drawdowns as the project hits milestones, rather than all upfront — keeping interest costs down.
Can first-time developers get it?
Some lenders support first-timers, usually wanting a strong professional team and more equity in the deal.
What is GDV?
Gross development value — the expected value of the finished project, central to how much lenders will advance.
How do I repay development finance?
By selling the completed units or refinancing onto a term mortgage. Line up your exit before starting.