Posted April 30, 2021

Property Developer Finance: What Is It and How to Know Which Type You Need?


Looking to develop or convert a property? It is likely that you will need development finance to help cover costs.

Although property development finance can be complex in some cases, our team of specialist finance brokers in Birmingham have extensive experience in securing mortgages for property developers across the country and can help you to find a solution that best suits your requirements.

Development finance covers an array of financial solutions that are continuously evolving as the market becomes more populated with specialist lenders.

What types of property developer finance are available?

There are several kinds of property developer finance from different development finance lenders and facilities available.

Designed to be a short-term funding solution that is usually paid back within 12 to 24 months, property development loans allow developers time to complete construction and arrange disposal via sale or refinance to pay off any outstanding development loans.

Ground up development loans

If you have purchased or are looking to purchase a piece of land, we can help you find a loan to cover 100% of build costs and potentially additional funding towards the initial purchase.

This is usually for those looking to purchase between 1-100 units and the amount of loan is awarded based on experience, location and cost of works, this type of loan is usually borrowed from challenger banks and specialist finance brokers.

Refurbishment bridging loans

Refurbishment bridging loans can be used to fund solely renovation and improvement projects or to cover the costs of a property outright and its renovation bill.

This type of loan can range from covering the cost of a simple refurb, such as a kitchen or bathroom refit to development that requires planning permission such as an extension or loft conversion.

The amount of loan available depends on the extent of the works – whether it is a light or heavy bridging loan – as levels of finance depend on its projected value when the refurbishments have been carried out.

Residential bridging loans

Short term, interest-only and available on a shorter notice period, residential bridging loans are often used as they are adaptable to more situations than a high street mortgage. For example, residential bridging loans could be used when buying and selling properties, or during refurbishment work.

Given on the value of the property and your ability to pay back, these loans can help bridge the gap between types of lending. For instance, they can be used to buy a property while you wait for your high street mortgage application to be completed – bridging the finance.


If you’re specifically looking to buy a property to rent, you could use a bridge-to-let loan to cover the cost short term while you’re waiting for a buy-to-let mortgage.

These bridging loans are available for both commercial and residential properties and your application would be assessed based on whether you are likely to achieve 100% rental coverage.

Commercial bridging loans

Commercial bridging loans are best for bridging a funding gap when buying or renovating a commercial property.

These loans are available for both commercial and semi-commercial property i.e. consisting of both commercial and residential elements – for example, a shop with a flat above.

Who can apply for property development finance?

Whether you’re an experienced or first-time developer, anyone can apply for the funds needed to finance your property development with the help of a specialist broker.

At Finance 4 Business, we have extensive experience in helping developers across the country access the development finance they need.

How can you apply for development finance?

The easiest way to apply for development finance is through a specialist financial broker such as Finance 4 Business, who will work with you to find the solutions you need.

Initially, we will chat with you to learn more about the project and whether you may have any unique requirements, giving our expert consultants an indication of how much finance is needed so we can find an effective solution.

We have strong relationships with our development finance lenders, and understand what they are looking for, any apprehensions they could have and can advise on how you can overcome them.

Find out how we can help you by calling 0121 309 0444 or email