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Development Finance: 70% LTGDV for Inexperienced Developer Stepping Up

Positive Commercial Finance specialises in stretched senior development finance for ambitious developers making their next big leap. This case study highlights how we supported a relatively inexperienced developer moving from a single house to an 8-house scheme.
The Challenge

After successfully completing his first residential project (one house), the client secured a site with planning consent for 8 houses. Key difficulties included:

  • Limited cash available from the first scheme
  • The developer wanted to self-project manage (no main contractor on a fixed-price basis)
  • High gearing required at 70% Loan to Gross Development Value (LTGDV)

Most lenders are unwilling to back such a significant step-up in scale without substantial developer equity.

Our Solution
We identified a specialist lender who recognised the client’s skills and was comfortable with the self-managed approach and high LTV structure. The facility was arranged as a Stretched Senior development finance solution to meet the project’s needs.

Deal Structure

  • Loan to Gross Development Value (LTGDV): 70%
  • Interest Rate: 1.2% per month (interest retained)
  • Arrangement Fee: 3%
  • Exit Fee: 1.2% (based on facility amount)
  • Term: 12 months
The Outcome
The developer obtained the funding required to proceed with the 8-house scheme, enabling a confident step up in his development career without needing a main contractor or large cash injection.
ALL CASE STUDIES
John Waddicker

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John Waddicker
On 07974 703375 or message here
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Positive Commercial Finance is a trading name of Business Financial Solutions Limited. Registered in England & Wales 06451075. Registered office address Fourth Floor, Unit 5B, The Parklands, Lostock, Bolton, BL6 4SD . Authorised and regulated by the Financial Conduct Authority (716012). Full members of the NACFB and FIBA. ICO registration reference Z1196910.

Business Financial Solutions Limited is an authorised credit broker and not a lender. We work with a panel of lenders who will typically pay us a commission. This amount varies between lenders.

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