Development Finance: The Drawdown, Stage by Stage
Development finance is not a lump sum. It arrives in tranches against certified progress, and every other feature follows from that.
Development finance is not a lump sum. It arrives in tranches against a monitoring surveyor’s certification of work actually done, and every other feature of the facility follows from that one fact.
Hosted by Georgina. Written analysis by Matt Lenzie.
In this episode
- Why the money arrives in stages and what a drawdown actually requires
- How gross development value is assessed, and why a lender discounts yours
- Loan to gross development value at 65 to 70 per cent, and what that means in cash
- Interest rolled up through the build rather than serviced
- Build cost contingency and who decides it
- What a lender wants from a first time developer in place of track record
Guides in this series
- The product itself, and how a facility is actually structured
- Residential ground-up, the standard case
- How the rate is built: reference rate plus margin
- Modelling a scheme before you apply
- Loan to gross development value, the metric that sizes the loan
- How GDV is assessed and why lenders discount it
- The lender landscape and who does what
- What a broker changes about the outcome
- Self build and custom build, the consumer-adjacent lane
- The first scheme, and what a lender wants instead of track record
- Construction lending as distinct from development lending
Where to go next
Development finance on the Construction Capital site carries the current terms, worked examples and the full guide set. The wider service range is at Construction Capital.
Construction Capital is a trading name of Lenzie Consulting Ltd, registered in England and Wales, company number 08174104. We are a commercial finance broker and introducer, not a lender, and we are not authorised by the FCA. Where a deal is a regulated activity we arrange it through lenders who hold the relevant FCA permissions. Every figure is indicative, varies by lender and deal, and is never an offer of finance.
