Search

What is Development Finance?

Understanding development finance for UK companies

Development finance is a specialised funding solution designed to support property developers in financing construction and renovation projects. It is ideal for projects such as new builds, property conversions, or significant refurbishments. This short-term funding typically spans 6 to 24 months and is structured to meet the specific needs of each development project.

Get a quick cash flow finance solution with Novuna - boost your cash flow within 24 hours! 

Get a quote online or call us on the freephone number below to have a chat with one of our cash flow financing experts.

Boost your cash flow 0808 250 0859

What is development finance?

Development finance is a type of funding designed specifically to support property developers and investors in financing construction or renovation projects. It typically provides short-term funding to cover the costs of land acquisition, building works, and associated development expenses.

How does development finance work?

Development finance operates on a phased funding model, allowing developers to access funds at different stages of the project. These stages typically include:

  • Site acquisition funding: This initial phase provides funds to purchase the development site, whether it is land or an existing property requiring renovation.
  • Construction cost coverage: The loan covers the costs associated with the build, such as materials, labour, and equipment. Funds are usually released in stages, aligned with the project’s progress and pre-agreed milestones..

Key features of development finance

High loan-to-cost ratios

Funding can cover up to 100% of construction costs, depending on the lender's criteria.

Flexible loan terms

Development finance is tailored to the project’s timeline, ensuring funds are available when needed without long-term commitment.

Loan-to-value (LTV) ratios

Many lenders offer up to 65% of the property or land’s current value.

Who can use development finance?

Development finance is suitable for a range of users, including:

Experienced developers

With a proven track record of completing similar projects, experienced developers may qualify for more favourable terms.

First-time developers

While terms may vary, lenders often support new developers, especially when they have strong professional teams or partnerships in place.

Business owners

Companies looking to expand their premises or invest in property for commercial purposes.

How to apply for development finance

Project feasibility assessment

Lenders evaluate the project’s plans, costs, and potential returns.

Detailed proposal submission

Developers present their project plans, including planning permissions and budgets.

Exit strategy planning

Lenders require a clear repayment plan, such as selling the completed property or refinancing.

Why choose development finance?

Development finance is an essential tool for property developers aiming to bring their visions to life. It provides the financial flexibility to take on ambitious projects, helping developers achieve their goals while managing risks and optimising cash flow.

For more information on how development finance can help you, contact us today to speak with one of our experts.

Have you ever thought about invoice finance to help improve your cash flow?

Invoice finance allows you to release cash quickly from your unpaid invoices.

As your lender, we can release up to 90% of your invoices within 24 hours. On payment of the invoice from your customers, we will then release the final amount minus any fees and charges. There are different types of invoice financing options available to businesses depending on the situation and the level of control they require in collecting unpaid invoices.

We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our confidential invoice discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

Get in touch

Contact our friendly UK advisors on our freephone

0808 250 0859

8:45 - 17:15 - Monday to Thursday &
8:45 - 16:45 - Friday

The benefits of cash flow finance companies such as Novuna Business cash flow

  • Boost your cash flow without having to wait up to 120 days for your customers to pay you

  • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled

  • Access funds within 24 hours from initial appointment with our revolutionary digital onboarding process

  • Benefit from our in-house credit control processes, allowing you to focus on running your business, instead of chasing clients for payment

  • Six month trial period followed by a rolling contract

Want to understand more cash flow finance terms?

Our Cash Flow Finance Resource Hub has been set up to help SME's with cash flow finance advice, tips and resources to help with their cash flow position.

We explore ways you can begin improving your cash flow situation and start getting your business on track to positive cash flow.

Quickly get the right cash flow finance solution for your business, simply fill out the requirements below to get your quote:

We'll compare the best cash flow financing products available to get you the best deal.

Back to top