Development Finance

Development finance is a specialised funding solution designed to support property developers for the construction and refurbishment of residential, commercial, and mixed-use projects.

At Shawbrook, we offer bespoke property development financing options tailored to meet the unique needs of each project, ensuring flexibility and efficiency throughout the development process.

Our offerings include Planning Assistance Loans, which help developers enhance already agreed planning permissions, and Development Exit Finance, providing a seamless transition from construction to sale.

With Shawbrook's Development Finance, you can manage cash flow effectively and only pay interest on the funds released.

Financing a property development typically involves combining equity with external funding. Developers may use their own capital, joint venture equity, or short-term options like Bridging Finance for site acquisition.

For most multi-unit projects, the primary route is Development Finance. The process usually starts with agreeing terms with a lender based on your scheme, experience and projected GDV. Once approved, funding is structured to cover build costs, with drawdowns released in stages as the development progresses. The loan is then repaid through unit sales or refinancing onto a longer-term facility.

Our Development Finance is designed for experienced property developers working on a range of build types:

• New build, conversions and refurbishment
• Residential, commercial and mixed-use developments
• High value residential projects
• Student housing, senior living and co-living
• Care homes
• Phased development schemes

Ground-Up Development Finance 

Designed for projects that involve constructing new buildings from scratch. This type of financing is ideal for developers looking to build residential, commercial, or mixed-use properties on vacant land. Examples of specific purposes for ground-up development loans include constructing new housing estates or apartment buildings.

Refurbishment Finance

Caters to projects that involve significant structural changes or extensive renovations to existing properties. This type of financing is suitable for developers undertaking large scale refurbishments, such as converting commercial buildings into residential units or carrying out major structural repairs.

Applying for Development Finance at Shawbrook is straightforward. Follow these steps: 

1. Submit Enquiry: Contact Shawbrook to discuss your project and funding needs. Indicative terms provided at this stage.
2. Application Form: Complete and submit the application form with the required details.
3. Documentation: Provide supporting documents such as project plans, financial appraisal, and details of previous experience.
4. Assessment: Shawbrook will review your application (e.g. due diligence including a site visit).
5. Offer: If approved, you'll receive a formal offer outlining terms and conditions.
6. Acceptance: Sign and return the offer to accept the financing terms.
7. Completion process: Formal valuation and monitoring surveyor reports and legal due diligence undertaken.
8. Drawdown: Access funds as your project progresses, paying interest only on the amount used – funds are paid out in arrears against evidenced work on site.

Development Finance and Bridging Loans at Shawbrook serve different purposes and have distinct terms and repayment structures.

Typically, Development Finance is used to fund ground-up developments or major refurbishment projects. Funds are released in stages as the project progresses and the loan is assessed against the future value of the development. Development Finance facilities also generally run over a longer term than Bridging Loans. 

Bridging Loans are typically shorter-term facilities, often for property purchases or refinancing. They are usually assessed against the current value of the property and paid out in full on completion of the loan.