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Compare Property Development Finance

Loans for businesses of every size and industry, from top UK lenders including:

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    Suppliers that don't offer All Property Development Finance Loans but may offer suitable alternatives:

    • Portman Asset Finance logo
      Broker

      Portman Finance Group

      • Loans for any business purpose, from cashflow to new equipment, vehicles or expansion
      • Term business loans, recovery loans, short-term and flexible funding, asset finance, vehicle finance
      • Dedicated account managers to guide you, understand your business and find solutions tailored to your needs
      • Minimum annual turnover
        £100,000
      • Available amounts
        £10,000 - £2,000,000
      • UK Available terms
        3 months - 6 years
      See Deal
      • iwoca logo

        iwoca

        • Flexible finance for small businesses from £1,000 to £1,000,000
        • No long-term commitments and flexible repayments to fit your business
        • Apply online in minutes for a quick decision (some may take up to 24 hours). Applying won’t affect your credit score
        • Minimum annual turnover
          £10,000
        • Available amounts
          £1,000 - £1,000,000
        • UK Available terms
          0 months - 2 years
        See Deal
      • 2 more from iwoca
      • Barclays logo

        Barclays

        • Flexible borrowing for your business - unsecured (up to £100,000) and secured loans available
        • Fixed interest rates available on all loans, plus variable interest rates for loans over £25,000
        • Subject to application, financial circumstances and borrowing history. Eligibility criteria applies
        • Minimum annual turnover
          No minimum
        • Available amounts
          £1,000 - £100,000
        • UK Available terms
          12 months - 25 years
        See Deal
      • 2 more from Barclays
    • 365 Finance logo

      365 Finance Merchant Cash Advance

      Credit/debit card sales required
      • Pay back via a small % of future card sales
      • No security or business plans required
      • One all-inclusive cost. No admin fees, APRs or extras
      • Minimum annual turnover
        £120,000
      • Available amounts
        £10,000 - £400,000
      • UK Available terms
        4 - 18 months
      See Deal
    • YouLend logo

      YouLend Cash Advance

      Credit/debit card sales required
      • Optimise your cash flow and make repayments in line with your sales
      • No interest rate is charged, just a one-time fixed fee
      • Minimum annual turnover
        £36,000
      • Available amounts
        £3,000 - £1,000,000
      • UK Available terms
        1 - 18 months
      See Deal
      • Funding Xchange logo
        Broker

        Funding Xchange

        • Funding Xchange can compare multiple lenders from one simple funding request
        • Get instant and personalised loan offers in just 3 minutes
        • Easily compare terms available and the search won’t affect your credit rating
        • Minimum annual turnover
          £10,000
        • Available amounts
          £1,000 - £1,000,000
        • UK Available terms
          1 month - 6 years
        See Deal
      • 5 more from Funding Xchange
      • Capify logo

        Capify

        • Flexible, reliable business funding from £5,000 - £750,000
        • Same-day funding options available
        • Check your eligibility online in two minutes
        • Minimum annual turnover
          £120,000
        • Available amounts
          £5,000 - £750,000
        • UK Available terms
          3 months - 2 years
        See Deal
      • 2 more from Capify

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. Use the sorting options at the top of the comparison table to order by other criteria.

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What is a business loan?

A business loan is a form of finance that can be used to help support and expand your organisation.

As with personal loans, you borrow a sum of money, and pay it back, with interest.

One of the most important differences between personal loans and business loans is that with a personal loan, you will be personally liable for repaying the amount you have borrowed.

With a business loan, as long as the appropriate company structure is in place, that responsibility falls to the business instead. This will not be the case, however, if you are a sole trader, or you have secured your business loan with a personal guarantee.

You can also typically borrow more through a business loan, while the interest payments on your business loan may be tax deductible unlike payments on a personal loan.

Types of business loan

Secured business loans

Secured business loans require that you put down an asset such as property as security. Secured loans often come with lower interest rates than unsecured loans as they represent less risk for the lender. They may also give you access to a larger loan amount over a longer term. However, secured loans come with the added risk that you could lose your assets if you miss the payments.

Compare secured business loans

Unsecured business loans

Unsecured business loans are a type of finance that does not require security. These types of loans tend to have higher interest rates because there is a greater risk of the lender losing money if you can't pay off what you owe. Unsecured business loans also require a good financial history and credit rating as evidence that the business will be able to repay the loan.

Compare unsecured business loans

Government loans

There may be government-backed business loans you can access. Examples include the Recovery Loan Scheme, introduced to help with the financial stresses caused by the Covid-19 pandemic, which has now been extended. What schemes are available can vary depending on government policy and changing economic circumstances across the country. So it can be useful to regularly check the Department for Business, Energy & Industrial Strategy's search tool for guidance on the business loan schemes available in your region.

Start up business loans

The Start Up Loan Scheme is a government-backed fund that currently offers personal loans of up to £25,000 to UK businesses owners that have been fully trading for less than 36 months or those looking to start a business. You can apply for free, and there are no early repayment charges. If your application is successful, you'll also get up to 12 months of free mentoring. Government Start Up Loans have a fixed annual interest rate of 6% and must be repaid over a period of one to five years.

Compare start up business loans

Small business loans

Small business loans are for start ups and small businesses to access funding. They can be used for a variety of purposes from hiring new staff to managing cash flow. As with all loans, small business loans are repaid over an agreed time period with interest. Large business loans tend to be cheaper than small business loans because there is less perceived risk with lending to a bigger company.

Compare small business loans

What is property development finance?

Property development finance is a type of funding specifically designed to fund commercial or residential property developments. It can be used for a range of projects, including new-builds, conversions, renovations, and more.

The term ‘property development finance’ covers a broad range of finance options. There are specific development loans available, but bridging loans, secured loans, commercial mortgages, and other types of finance can also be used for property development. The option that will be most suitable for your plans will depend on what your proposed development project is and how much it is expected to cost.

How does property development finance work?

When you apply for any type of property development finance, lenders will want to see your exit strategy to show how you will repay the loan. The lender will conduct credit checks and look at the finances of you and your business (if applicable), as well as checking your development plans to make sure that the project stands a good chance of succeeding and returning a profit.

If your application for finance is approved, you may receive your funding in a lump sum or you may receive it in instalments. This will depend on the type of development finance you have and how much you borrowed.

Unlike many other standard loans, typically you won’t need to repay your development loan or make any interest payments each month. Instead, you will usually repay this type of finance (plus the interest) in full at the end of the term once your project is complete.

For example, if you take out a bridging loan, you can use this money to buy the property and renovate it. You can then sell it on and repay the loan. Bridging loans are intended to be short-term, and so wouldn’t be appropriate for lengthy, large-scale projects.

If you are looking to buy a property in order to rent it out, a buy-to-let mortgage is likely to be more suitable than a property development loan.

What are the pros and cons of property development finance?

Pros

  • The main advantage to property development finance is that you can access relatively large sums of money, which can cater for a range of projects from small-scale renovations to complete building works. Your development project may not qualify for standard loans from mainstream lenders, but specialist property development finance may be able to offer funding.

  • For example, you are unlikely to get a standard mortgage for a dilapidated property that you plan to renovate, but you may be able to use property development finance instead.

  • Also, unlike standard personal or business loans, you can repay the loan in full when you sell the finished property. This means you won’t need to worry about making monthly repayments during the project.

Cons

  • However, because property development comes with risk and will often involve large sums of money, the application process can be lengthy.

  • Furthermore, because you need to repay the loan in full at the end of the term, you may feel pressure to finish your project quickly so you have time to sell and repay. There are options, such as taking out more finance, if you haven’t managed to complete your project and pay off the loan by the end of the term, but this will increase the total amount you need to repay.

How to apply for property development finance

  • If your planned developments require planning permission, it would be useful to get this before applying for finance. Some providers may be able to offer some funding before you get planning permission – to buy a plot of land or a property, for example – but you will need to have all the necessary permissions to access further finance for your development project.

  • When you apply, lenders will want to see how you plan to repay the loan, so you will need to show them plans for your project. They will want to know key information, such as the cost of the property and the estimated total cost of the project, as well as how long you expect the work to take.

  • They may also ask for extra reassurance about the project, such as confirming that you are using professionals and conducting their own independent valuation of the property, and they may want to make sure you have enough funds in reserve to make up any shortfall or unexpected expenses.

  • Additionally, as with other loans, lenders will check your credit score and the credit rating of your business (if applicable).

Property Development Loans FAQ

Can I get a development loan for land without planning permission?

Many lenders will require you to have planning permission for your project (if it’s necessary) when you apply for property development finance. However, if you are waiting for permission to be granted, you may still be able to apply for a limited amount of funding from certain lenders – to buy land, for example – and then receive more funding when you have planning permission and are ready to develop the site.

How quickly can I receive a property development loan?

This will depend on the lender, the size of your planned works, and how much you want to borrow. Some lenders may pay the property development loan in instalments throughout your project.

Can I get a loan if I buy a property at auction?

Yes, there are specialist finance options available if you want to buy a property at auction but don’t have sufficient funds yourself. The type of property, its value, your plans for the property, and your own financial profile will influence your application.

Can I get a property development loan with a bad credit score?

If you have a bad credit score, you may find it more difficult to get property development finance. However, it’s not impossible. Lenders will look at the project you want to fund and other relevant information to help them make a decision on your application, not just your credit score. You may face higher rates of interest if you are accepted for a loan with a poor credit score.

Should I form a limited company for property development?

This decision is up to you and will depend on your own situation. You don’t necessarily need to set up a limited company for property development but, in some cases, it could make sense to do it. Make sure you research the tax implications of developing and selling property as an individual, and through a limited company.

Are property development finance and bridging loans the same?

Property development finance and bridging loans are not the same, but they can be used for similar purposes. As the name indicates, property development finance is for development projects, whether that’s building from scratch or converting or renovating an existing building. Bridging loans can be used if you want to buy a property, renovate it, and then sell it soon after. However, bridging loans are specifically intended to be short-term so they may not be ideal for larger projects, which will take longer to finish.

Bridging loans can also be used for other purposes, not just property development, such as if you want to buy a house but you haven’t sold your existing property yet.

Can limited companies or partnerships get funding for property development?

Yes, limited companies and partnerships are eligible for property development funding. Eligibility criteria will vary between lenders, so make sure you check that you qualify for funding.

What is GDV?

GDV stands for gross development value, which is the expected value of the project after all the work is completed. Many lenders will offer you finance worth up to a specified percentage of the GDV, so you will need to provide the rest of the cash yourself.

How long do I have to repay a property development loan?

The term of a development loan will depend on the scale and length of a project. For smaller projects, you may need to repay the loan after a few months or a year, while for larger projects you may have more time to repay.

What is development exit finance?

Development exit finance is a specialist type of short-term funding, which you can take out towards the end or upon completion of your development project. You can use exit finance to pay off your original property development loan, to give yourself more time to complete the works and/or sell the property.