01
A strong main contractor
A contractor with relevant completed projects, accounts that stand up and adequate insurance can substitute for a good deal of developer experience. Lenders will look at them as closely as at you.
Development
“This is my first development and lenders keep asking about my track record”
First-time developers can get funded, usually on smaller schemes and at lower leverage than an experienced developer would achieve. What closes the gap is the professional team around you: a competent main contractor, a quantity surveyor, and an appraisal that is honest about cost and programme.
An illustrative situation, not a client case study. It describes the kind of enquiry this market sees. Any figures are examples, not a quotation, and no credit check or lender decision is involved in reading this.
Sound familiar?
- You have planning consent, or are close to it
- You have never taken a scheme from site to practical completion before
- Lenders have quoted you lower loan to value than you expected, or declined outright
- You are being asked for a larger cash contribution than you budgeted for
The situation
Development lending prices experience heavily, and reasonably so. Most schemes that fail do not fail because the market moved; they fail because costs were underestimated, the programme slipped, and the developer had no reserves left when it mattered.
A first scheme therefore has to compensate in other ways. Lenders are looking for evidence that somebody on the project has done this before, even if it is not you.
Why the usual lenders say no
- Development finance is not a high-street product at all — it is a specialist market with a small number of active lenders.
- Several of those lenders have a hard minimum of one or two completed schemes.
- Without a track record, the appraisal has to carry the whole case, and most first appraisals are optimistic.
What usually works
02
Appointing a quantity surveyor early
A QS-prepared cost plan is far more persuasive than a builder’s quote, and it is the single cheapest credibility purchase available on a first scheme.
03
Starting smaller than you would like
A pair of houses funded and completed makes the next scheme materially easier to finance. A ten-unit first project frequently does not get funded at all.
04
More cash in, honestly evidenced
Expect to fund more of the land and the early works yourself. Lenders will want to see where that money came from.
Roughly how the numbers look
| Experienced developer — loan to GDV | Often 65% to 70% |
| First-time developer — loan to GDV | Frequently lower, and priced higher |
| Contingency lenders expect | 5% to 10% of build costs |
| Cash needed before first drawdown | Land gap, professional fees and the first works stage |
Drawdowns are released in arrears against inspected progress, so you fund each stage before you are reimbursed. That cash flow gap is what catches first-time developers out. These are examples to show the shape of a deal, not a quotation. Work out your own figures in the bridging calculator.
What we would need from you
- Planning consent, approved drawings and the schedule of conditions
- A costed schedule of works and a realistic build programme
- Your contractor’s details, accounts and previous projects
- Comparable sales evidence supporting the gross development value
- Proof of your cash contribution and its source
- Your own background — trade, construction or property experience of any kind
Things that catch people out
- An appraisal with no contingency reads as inexperience and will be questioned immediately.
- Do not rely on the highest agent appraisal for GDV. The valuer will test the comparables.
- Build a warranty in from the start; retrofitting one is difficult and expensive.
Questions we get asked
Can a first-time developer get development finance at all?
Yes, particularly on smaller schemes with a strong contractor and a credible professional team. Expect lower leverage and higher pricing than an experienced developer would see, and expect to put in more of your own cash.
What counts as experience?
Completed schemes of a similar type and scale are the gold standard. Relevant trade or construction background, or a track record of substantial refurbishments, all help. Lenders also credit experience held by your contractor and professional team.
Would a bridge be easier than development finance?
Only if the works are light. If value is being created by construction, staged drawdowns are what you need, and trying to force it onto a bridge usually costs more and runs out of money mid-programme.
The product that usually fits
Development financeEvery case is different. A specialist will confirm what actually fits yours.
Keep reading
Related situations and guides
“I have a site under offer and planning is not granted yet”
The site is available now but the consent that makes it viable has not been granted.
Read the scenario“My scheme is finished but the units are not selling and the loan is due”
Practical completion is done, some units are sold, and the development facility is approaching term.
Read the scenarioBridging vs development finance: which do you need?
The real dividing line between a bridge and a development facility, how each is drawn down and priced, and which one your scheme needs.
Read the guideAll situations
Eighteen situations across bridging, development, commercial and buy-to-let.
Browse them allAmram Finance Ltd is a credit broker, not a lender. We do not lend our own money and we do not approve or issue loan offers.
Your property may be repossessed if you do not keep up repayments on a loan secured on it. Some forms of bridging finance and buy-to-let lending are not regulated by the Financial Conduct Authority.