Development Finance
A structured, staged lending facility used to fund property development projects, based on the gross development value (GDV) of the completed scheme.
Development finance is a specialist property lending product designed for residential and commercial development projects. Unlike a standard mortgage or bridging loan (which are based on current property value), development finance is structured around the gross development value (GDV) - the estimated value of the completed project.
The facility is typically split into a land/acquisition loan and a build cost facility. Build funds are released in stages (tranches) as construction progresses, verified by a monitoring surveyor appointed by the lender. This staged drawdown structure reduces the total interest cost compared to drawing the full facility upfront.
Development finance is more complex and slower to arrange than a bridging loan (typically four to eight weeks) due to the detailed underwriting required: planning permissions, quantity surveyor reports, GDV appraisals, and developer track record all form part of the assessment. Spark Finance works with a specialist panel of development finance lenders.
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