Development finance funds the creation of value — turning land, approvals and a build programme into finished stock worth more than the sum of its parts. Because the security is changing throughout the loan, assessment looks forward at the plan rather than only backward at what exists today.
The four things under the microscope
- The site — location, planning status, and how much risk is already de-risked by approvals in hand.
- The numbers — total development cost, gross realisation, and the margin that cushions the whole facility.
- The team — a track record of delivering comparable projects on time and on budget.
- The exit — sales, refinance or hold, and how credible that outcome is at today’s values.
Why margin is the cushion
A lender sizes a facility so that even if costs run over or values soften, the completed project still repays the loan. The development margin is that buffer, which is why a thin margin makes a deal harder to fund regardless of how attractive the headline numbers look.
A fundable development proposal answers the lender’s questions before they are asked — costs evidenced, programme realistic, exit demonstrable.
Presenting a deal that moves
Speed in development finance comes from preparation. A clear cost plan, a realistic programme, evidence of the team’s delivery history and a defensible view of end values let a lender assess quickly and commit with confidence — which is exactly what a build timetable needs.