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Senior Debt

First charge development facilities with a massive range of options to suit your needs.

Senior Debt development finance is the conventional type of development funding, where the lender takes a first charge and can fund up to 65% of the Gross Development Value, or 80% of project costs, including an interest provision (so interest does not have to be paid monthly). Senior Debt is the cheapest form of development finance, particularly where the borrower can inject a good amount of cash on day one. 
Whilst a good level of direct development experience can give access to a wider range of lenders, there are lenders who can consider first time developers.  
Residential developments are preferred by most lenders, but there are options for mixed use, commercial, and industrial developments, countrywide.
What is Senior Debt?

“Senior” debt is a first charge development finance loan, that would typically make up the majority of the funds required to complete a property development project.

What type of lenders provide Senior Debt?

High Street Banks, challenger Banks, specialist lenders and family offices all provide senior debt. Such loans can vary rather dramatically from lender to lender, and the cost of the loan can be determined by the Loan to Cost or Loan to Value, and the experience of the applicant developer, as well as the location, size and type of development.

What is a Loan to Cost?

“LTC” is one parameter against which a lender will assess a loan. Most lenders will have a maximum LTC or Loan to Value (“LTV”) which they are comfortable with. If you add up all the costs associated with the project, including the cost of the finance, a lender will provide a certain percentage of that sum. That figure is their Loan to Cost, and is usually illustrated in percentage terms. The same applies to Loan to Value, in that lenders will be comfortable with a loan amount up to a certain percentage of the property value.

Can I get a loan against GDV?

The “GDV”, or Gross Development Value, is the aggregate value of the properties which are being created or built, using a development loan. Whilst all lenders will have a maximum Loan to GDV they are comfortable with, most of them will also have a Loan to Cost “cap”, and will work on the lower of those 2 figures, in determining the amount to cap their maximum facility in line with.

How do I get Senior Debt?

We will be delighted to help. Use our expertise to fast-track you through the vast choice of lenders, to determine the most appropriate options for your specific circumstances. Usually, we can provide you with a formal illustration or a Decision in Principle within 24 hours of receiving the pertinent project details. These would include (but not limited to) a narrative summary/ description of your project, a copy of the planning consent, a financial appraisal, detailed build costs, borrowers’ CV’s and any other relevant details.

With such a wide range of development finance lenders in the funding marketplace, each with their own parameters and criteria, utilise our services and spend your own time on the things which you do best! With no up-front costs, you have nothing to lose.

If you want a fast, flexible and reliable service, try
Positive Commercial Finance.


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