Development Finance: The Drawdown, Stage by Stage

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 episodeWhy the money arrives in stages and what a drawdown actually requiresHow gross development value is assessed, and why a lender discounts yoursLoan to gross development value at 65 to 70 per cent, and what that means in cashInterest rolled up through the build rather than servicedBuild cost contingency and who decides itWhat a lender wants from a first time developer in place of track recordGuides in this seriesThe product itself, and how a facility is actually structuredResidential ground-up, the standard caseHow the rate is built: reference rate plus marginModelling a scheme before you applyLoan to gross development value, the metric that sizes the loanHow GDV is assessed and why lenders discount itThe lender landscape and who does whatWhat a broker changes about the outcomeSelf build and custom build, the consumer-adjacent laneThe first scheme, and what a lender wants instead of track recordConstruction lending as distinct from development lendingWhere to go nextDevelopment 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.