100% Development Finance with Deferred Vendor Payment

Deal Structure

• 65% Loan to Gross Development Value (GDV)
• Interest rate: 1.2% per month (rolled up)
• 2% arrangement fee
• 1.5% exit fee
• No valuation report required

Deal Summary

Our experienced property developer client had been searching for the right opportunity for some time before identifying an exceptional residential development site in Yorkshire.

The site had detailed planning permission for 15 new homes, forming the first phase of a larger development. Once complete, the wider scheme would progress through two additional phases to create an exclusive private estate.

The developer negotiated a deferred vendor payment, allowing the land purchase and construction costs for Phase 1 to be fully funded through senior debt. They also secured an option agreement on Phases 2 and 3, providing a clear route for future expansion.

We were instructed to arrange 100% development finance for the project. Because the required Loan to Gross Development Value (GDV) was comfortably within the lender’s criteria, we secured funding that covered the entire Phase 1 acquisition and build costs. The deferred vendor payment effectively provided the developer’s equity contribution, removing the need for an upfront cash investment.

As the developer was also acting as the main contractor, they were able to begin site preparation and groundworks immediately following completion. This helped keep the project on schedule from day one.

Having reviewed the developer’s successful track record and previous projects, the lender was confident in both the team and the development. Combined with the site’s excellent location and strong planning consent, this gave the lender the confidence to support the scheme.

The development finance facility enabled our client to move forward without tying up their own capital, while retaining the flexibility to progress the remaining phases of the wider development.

If you’re looking for 100% development finance or want to use a deferred vendor payment to reduce your upfront investment, Positive Commercial Finance can source specialist funding solutions tailored to your development project.