Development finance calculator

How the maximum loan is worked out

Development finance is sized against two ceilings at once, and the calculator gives you the lower of the two because that is the one the lender will hold you to. The first is loan-to-GDV, a percentage (often around 65%) of the gross development value, which is what the finished scheme is expected to be worth. The second is loan-to-cost, a percentage (often up to around 90%) of your total spend on land plus build. Whichever produces the smaller figure is your maximum loan, and everything else follows from it. The equity you need is simply your total costs less that loan, and it is real cash you commit into the land and the early build stages before the facility does much heavy lifting. Interest is then modelled as rolled up, so nothing is paid monthly; the tool compounds the rate on the full loan across the term, adds the arrangement fee as a percentage of the loan, and deducts both, along with your costs, from the GDV to show a projected profit. That rolled figure is deliberately conservative, because in practice interest is only charged on the balance drawn down as the build progresses, so your real cost is usually a little lower.

Loan-to-GDV versus loan-to-cost, and which one binds

On most schemes one of the two caps does all the work, and knowing which one is a genuine structuring decision, not just an output. When your land was bought well or costs are tight relative to the end value, the loan-to-GDV cap tends to bind first: the lender will not lend past its comfort on the finished value however cheap the build was, so you may be leaving borrowing capacity on the table. When the scheme is tight on margin, with costs high against GDV, the loan-to-cost cap bites, and the lender simply will not fund the last slice of a thin deal. The practical lever is your equity. Putting more cash in lowers the loan against both measures and can unlock a keener rate; stretching the loan does the opposite and pushes the deal towards a stretched senior or mezzanine top-up, which prices higher. There is also the trade-off between rolled-up interest (no monthly outlay, but interest compounds and eats into exit proceeds) and a larger day-one equity cheque. Modelling both caps on your own numbers above shows you exactly which constraint is shaping the deal, and where an extra equity contribution actually changes the answer.

What actually drives the rate and the decision

Development lenders price the scheme first and the borrower second, so the numbers on the deal matter more than a headline credit score. The single biggest lever is profit on cost: the calculator shows your profit as a percentage of costs plus finance, and most lenders want to see 15 to 20% or more before they commit, because that margin is the buffer that absorbs a build overrun or a soft sale. A thin margin gets declined or heavily repriced whatever the LTVs say. Gearing is next: a deal near the loan-to-GDV ceiling carries more risk than one with a big equity cushion, and prices accordingly. Then comes the exit. A clear, evidenced route out, a sale into a liquid local market or a pre-agreed refinance onto a term facility or buy-to-let, reassures the lender far more than an optimistic sales assumption. Planning status is decisive too: full detailed permission prices well, while land bought subject to planning or with an outstanding condition either needs a specialist or is left for a bridge. Finally the team: a developer with a track record of delivering comparable schemes on budget is a materially better risk than a first-timer, and the rate reflects it.

How much you can borrow, and what lenders look for

UK development finance typically funds schemes from a few hundred thousand pounds up to tens of millions, over terms of roughly 6 to 24 months matched to the build and sales programme. As a rule of thumb you can expect a lender to advance up to around 65% of GDV or 90% of total costs, whichever is lower, with the balance as your equity, so on a scheme with a million pounds of costs and a 1.5 million GDV you would usually be putting in a meaningful six-figure cash contribution. Borrowing is almost always through a special purpose vehicle (a clean limited company set up to hold the site), and lenders will want personal guarantees from the directors. To move a case, have ready your costed schedule of works and build programme, the planning consent, a comparables-backed GDV appraisal, your development track record and the exit plan. Funds are released in staged drawdowns signed off by a monitoring surveyor who inspects progress before each tranche, so the lender is underwriting both the viability of the finished scheme and your ability to deliver it on programme. Any figure here is indicative; the loan, rate and terms are the lender's decision.

How we help you get a sharper rate

Development finance is priced deal by deal, and our job as your broker is to line the numbers up in your favour before a single lender sees the scheme.

We take it to the right lender first. The market runs from high-street-backed development books to specialist funds, challenger banks and private lenders, each with a different appetite by scheme size, region, build type and how much stretch they will fund. Approaching them one at a time is slow and burns your first impression. We hold that criteria across our panel, so we point your case at the lenders most likely to price it keenly and package the appraisal, costs and exit the way they underwrite them.

We structure the deal to price well. We will model the loan-to-GDV and loan-to-cost caps against your equity, test whether a small extra contribution unlocks a better rate, size the facility to the real build and sales programme rather than the longest term available, and present the profit on cost and exit in the terms a lender wants to see.

We tell you straight what is realistic. We cannot promise a rate or an approval, because those sit with the lender, but we will give you an honest read on where your scheme is likely to land, and flag a thin margin or a shaky exit before you waste weeks on it. It costs nothing to have us model it, and there is no obligation. Send us the appraisal and your costs and we will come back with indicative terms from lenders whose criteria fit.