1) Why this list matters if you’re hunting your first or next development loan
Are you stuck wondering whether your project sits in the sector that actually gets funded? Too many developers lose weeks — sometimes months — chasing the wrong lenders or polishing the wrong documents. This list is a straight, numbered set of practical actions and checks that tell you, quickly and clearly, whether your deal fits common lender appetites and what to fix if it does not. I’ve seen projects collapse because someone trusted marketing-speak or assumed high-street terms applied. That’s expensive.
What will you get from this? A quicker route to a yes, fewer wasted introductions, and a realistic plan to bridge the gaps lenders will spot first: deal size fit, exit clarity, contractor strength, contingency buffers and the finance mix. Expect pointers on the numbers lenders use - GDV, LTV, LTC - and the documents that actually move the needle in an underwriter’s head.
Ask yourself: what’s the single thing stopping an underwriter saying yes right now? We’ll walk through the typical answers and how to fix them without fluff.
2) Know exactly which lender types fund £100k-£5m deals and how each sizes risk
Which lenders matter for your deal size? There are four big camps: specialist development funds, challenger banks, bridging and private lenders, and institutional mezzanine providers. Each has distinct appetite and paperwork requirements. Specialist development funds commonly target projects in this band. They will lend based on LTC (loan to cost) and usually demand experienced teams and a clear exit. Challenger banks may consider smaller deals but often require an established track record and stricter covenant tests. Bridging lenders are flexible on speed and security but cost more and expect a clean exit plan. Mezzanine providers fill equity gaps when you want to retain more equity, but they add interest and often take a share of profit.
How do they size your loan? Two core measures: LTV - loan to value - and LTC - loan to cost. For development finance the meaningful metric is often LTC: lenders want to see their loan covers a defined slice of the total development budget. Typical numbers you should expect: senior lenders 60-75% of GDV or up to 70-85% of build costs (LTC), bridging lenders up to 70-75% LTV on security, mezzanine can top up but at higher cost. That tells you where your equity needs to sit.
Concrete example: a conversion with GDV £1.2m and total cost £700k. If a lender offers 70% LTC, they will provide up to £490k. If you planned on £600k senior, you need either more equity or mezzanine finance. Which route is cheapest depends on how fast you can exit and the risk profile.
3) Present a lender-ready budget: realistic build costs, contingency and credible contingencies
Do you have a cost plan that reads like it was prepared by someone who has built this exact thing before? Lenders will strip your budget to the bones. They expect an itemised build cost, clear allowances for professional fees, sales and marketing lines if you’re selling units, and a contingency that fits the project complexity - typically 5-10% for straightforward refurbishments, 10-15% for conversions or projects with planning risk.
Which numbers get questioned most? The site acquisition cost, abnormal costs, and sales values. If you present an optimistic GDV without comparable evidence from the local sales market or you assume minimal abnormal costs on a brownfield site, lenders will either reduce facility sizing or add haircuts. That’s why you need third-party estimates: a contractor quotation, a QS cost plan and a market valuation that supports the GDV.
Example: small build of three homes, projected costs £450k. Contractor quote confirms £360k build cost, QS adds £25k for prelims and £25k for fees, contingency 10% (£45k). Lenders want to see these documents. If contingency is missing or the contractor is unverified, expect a reduction in the offered percentage or a demand for more equity.
4) Prove exit strategy and timing - lenders hate open-ended plans
What’s your exit and when will it happen? That question decides whether a lender underwrites the deal. Exit routes are typically sale, refinance to long-term debt, or forward sale to an end-buyer. Each has different evidence requirements. For a sale, lenders want comparable evidence - recent transactions for similar properties in the area, expected marketing periods and sales agent confirmation. For refinance, you must show long-term lenders' appetite for the asset post-completion, often via indicative offers or discussions with buy-to-let or commercial mortgage lenders. Forward-sale requires contracts or letters of intent from a reliable purchaser.
Timing matters. Build programmes should be realistic and stage drawdown tied to measurable progress points. Lenders monitor progress and will link drawdowns to certified works. If your programme is overly aggressive, the lender will reduce facility or add margin. Think like a lender: what would make you confident this deal returns capital within the projected window?
Example: a two-phase apartment block with 12 months construction then 3 months marketing. If comparable sales show 6-12 month marketing times, build in the longer range. If not, provide a sales agent letter confirming expected launch schedule based on current demand. That letter can convert a sceptical underwriter to a conditional yes.
5) Structure the equity and debt mix to minimise personal exposure while keeping costs affordable
How much of your own cash should you bring to the table? Lenders want skin in the game. For most projects in this band you should expect to provide 20-35% of total project costs in equity, although the exact split depends on lender appetite, site risk and your track record. Bringing in a joint-venture partner can reduce your cash requirement but introduces profit-sharing and governance trade-offs.
Which instrument to use when you need a top-up? Mezzanine debt or preferred equity can bridge shortfalls. Mezzanine is quicker than raising new equity but carries higher interest and often a share of upside. Consider the cost over the project timeline: a 12-month mezzanine facility at 12-15% is expensive; if your exit is uncertain, the interest burden can wipe margins. Also, be prepared for personal guarantees - many lenders will require at least some director guarantees for developers without an established company track record.
Example: you require £1m funding for a £1.4m development. If a senior lender will do 70% LTC on certain costs equating to £700k, you still need £300k to hit total costs. A mezzanine facility might supply that, at 12% and a 10% profit share. Weigh that cost against selling a small minority of the project to an equity partner who might demand 25% of net profit. Which retains more upside? Which adds slower decision-making? Those are the practical trade-offs you must quantify.
6) Create one lender-ready pack and build relationships before you need cash
Do you have one single document folder that answers the basic underwriting checklist in less than 10 minutes? Lenders are busy. If an underwriter can open your pack and quickly confirm value, costs, programme and contractor competence, Click here you’re ahead. Your pack should include: an executive summary, site plan and photos, planning status with conditions, GDV evidence, detailed cost plan, contractor CV and contract, project programme, exit strategy, proof of funds for equity, and key company/director financials.
How do you build relationships? Call the right people early. Meet the development manager at a specialist lender, introduce the project and ask bluntly whether the scale and risk profile fits their appetite. If they say no, ask why. That saves time. Use broker relationships if you don’t have direct access - but vet the broker. Good brokers know which lenders will consider your project size and will get you seen; poor brokers spray proposals and create noise that slows you down.
Example: a developer with three small conversions created a tidy PDF pack with QS cost plan, contractor CVs and comparable sales. The pack led to two conditional offers within three weeks. The reason is simple: the lender could underwrite faster because the pack removed guesswork. You want that speed when rates change or opportunities are time-sensitive.
7) Your 30-Day Action Plan: get from uncertainty to a lender-ready position fast
Day 1-7 - Gather the essentials
Ask yourself: what single document will an underwriter open first? It’s the executive summary and budget. Pull those together. Commission a QS estimate and a valuation that supports the GDV. If you don’t have contractor quotes, get at least two for the build. That’s the minimum you need to talk to lenders credibly.
Day 8-14 - Clarify the exit and tighten the programme
Contact a sales agent for a market appraisal and a marketing timeline in writing. If refinance is your exit, speak to potential long-term lenders and get indicative terms. Finalise your build programme with milestone dates aligned to realistic sales timings. Recalculate contingency to reflect site-specific risks and add it to the budget.
Day 15-21 - Pick financing partners and test appetite
Identify three lenders that match your deal profile: one specialist, one bridging/private lender, one potential mezzanine or equity partner. Make short, targeted introductions. Send your lender pack and ask precise questions: would they consider this deal at X% LTC / Y% LTV? What are likely conditions? Get those answers in writing so you can compare apples to apples.
Day 22-30 - Negotiate and lock the structure
Assess the responses and pick the cheapest credible structure that meets your timing. If no single lender covers your needs, negotiate a senior + mezzanine split with both parties aware of the combined structure. Ensure your legal team reviews heads of terms and that any personal guarantee exposure is limited and time-bound. Before signing, run the numbers again with worst-case sales timing and a reasonable increase in interest costs to ensure margins hold.
Comprehensive summary - the checklist to keep on your desk
Quick checklist: is your GDV supported by comparables; do you have a QS cost plan and contractor quotes; is your contingency sensible for the project; have you defined a credible exit with timings; have you matched lender type to deal size; is your equity position clear and affordable; do you have a single lender pack ready? If the answer is yes to most of those, you are ready to approach lenders. If not, fix the gaps first - chasing offers without the basics only wastes time and damages your credibility.
Final question: are you prepared to trade a small slice of profit now for speed and certainty, or hold out for a cleaner, cheaper structure that takes more time? That’s the commercial decision every developer must make. Be honest with yourself and act accordingly.
If you want, I can review your executive summary and budget and tell you, bluntly, which lender types will look and what the most likely sticking points are. Want me to look at a project? Send the headline numbers and a one-page summary and I’ll respond with a clear next step within two working days.