Content Writer
Head of Bridging & Commercial
Property development projects are not as straightforward as other commercial mortgages. They require complex, staged funding structures, which vary based on the type of development you’re planning.
Navigating the specialist commercial development finance market can be time-consuming and costly, not to mention overwhelming, especially if you’re a first time property developer.
At Echo Finance, our dedicated team assists property developers across the UK in arranging tailored funding for all types of property development projects. In this article, we’ll look at the benefit of using a broker with specific experience in commercial development finance.
Connect with a development finance specialist
What is a Development Finance Broker?
It's a specialist financial adviser who connects property developers with a range of lenders who are able to finance construction projects. Unlike standard mortgage brokers who arrange single lump-sum loans for completed properties, a property development finance broker understands the mechanics of arranging finance in phased drawdowns to match your construction phases.
They also know how to work with gross development value (GDV) and loan to cost (LTC) ratios, which gives them a better understanding of how lenders will assess the value of your project in order to maximise funding.
How are they different to general mortgage brokers?
When it comes to commercial development finance, it’s best to have the support of a broker with experience in this niche, as they have skills and knowledge that the average mortgage broker won’t necessarily have. This includes:
Knowing how to assess your project - This allows them to evaluate your build costs, site purchase price, projected GDV, and schedule of works in the same way specialist lenders will. This helps them to package your proposal for the best possible outcome
Access to relevant lenders - Commercial development finance tends to be arranged by private funds and niche lenders, which are not accessible directly to retail borrowers. Specialist development finance brokers have regular contact with this type of lender, and understand their criteria well
Understanding complex loan structuring - There are multiple fund structures offered by commercial lenders, including senior debt, mezzanine finance, or stretch equity. Specialist brokers know how to use these, in unison, where possible, to maximise your borrowing and reduce the burden of self-funding certain elements of the project
Exit strategy planning - Development finance is a temporary funding source that will support the actual development phases of your construction project. However, arranging long-term refinance is vital to achieving the development finance you need. Whether you’re looking to transfer your asset onto a buy-to-let mortgages, a longer-term commercial investment loan, or arrange immediate sale as your exit strategy, a broker with experience in this niche will be able to help you decide upon the right option
Who are our development finance brokers?
Echo Finance has multiple advisers who can arrange development finance, as well as other types of commercial loan, but we also have brokers who explicitly specialise in commercial development finance.
Chris Duckworth, our head of bridging and commercial, is an expert in property development finance, as well as commercial mortgages, and bridging finance. He handles most of our development finance enquiries, and has built up a strong relationship with lenders in this niche.
Head to our broker directory to find out more about Chris and our other development finance advisers.
Chris in the press
Chris Duckworth has an impressive career in commercial finance, having been the North Western regional BDM for Together, he joined Echo back 2022, as our head of bridging and commercial.
He was recently featured in The Telegraph, where he commented on the importance of using a knowledgeable team when arranging commercial finance, as well as the pitfalls of navigating this type of project as an inexperienced investor.
Why work with a property development finance broker?
Structuring a development deal requires knowledge in multiple areas, beyond simply arranging a loan. From balancing land acquisition costs and professional fees to setting up adequate build contingencies.
Working with an experienced property development finance broker, therefore, offers several distinct advantages:
Access to lending - Many development lenders operate exclusively through intermediaries, meaning arranging this type of funding without a specialist broker will seriously limit your access to the market
Maximising your LTV - Brokers in this niche know how to stretch your equity further by structuring mezzanine layers to achieve up to 90% LTC in some cases
Matching your build schedule - Brokers are able to negotiate flexible fund drawdowns that align with your construction schedules, so that your project doesn’t grind to a standstill while awaiting the next funding tranch
Negotiating favourable terms - As well as securing the right amount of funding, which is released at the right times, having the right exit terms, and monitoring conditions to suit your project can be critical to the overall success. Brokers have strong working relationships with lenders, and understand how to present your project to ensure their terms are drawn up to suit you
Speak to a development finance broker today
If you need to arrange short-term finance for your development project, we have specialist brokers who truly understand this niche market.
At Echo Finance, we offer a free, no-obligation initial consultation. This allows us to understand your borrowing needs, assess your exit strategy, and clearly explain your options before you commit to anything.
Call us today on 08000 934914 or make an enquiry through our website, and we will connect you with one of our development finance specialists right away.
FAQs
Broker fees typically range between 1% and 2% of the total facility amount, often offset or covered by arrangement fee structures negotiated directly with the lender. However, your initial chat is always free, and we’ll always ensure you understand the fee structure before you proceed.
Find your local adviser
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.