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Senior Debt

What is Senior Debt?

Senior Debt development finance is the conventional type of property development loan, where the lender takes a first charge over the site/ property being developer, 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, towards the land/ property purchase (or refinance).

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, student accommodation, leisure, care home and industrial developments, countrywide. Currently there is a massive range of first charge development finance facilities, with options to suit a vast range of circumstances.

What is Senior Debt used for?

“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. Such facilities are to be used specifically for property development, and are structured in such a way to best suit the proposed scheme.

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.

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.

What are the Key Features of Senior Debt?

Typically up to 65% of GDV, or 80% of project costs

Arrangement fees from 1%

Interest rates from 4% per annum

Options with no Exit Fees

Up to 24 months, or longer by agreement

Minimum loan £50k, with no maximum loan size

Options with no Personal Guarantees.

Countrywide coverage

Valuation and Monitoring Surveyor (“MS) fees case by case.

What are the Senior Debt lending criteria?

First charge lending only

Greater development experience gives access to cheaper rates

Multi-unit schemes preferred, but single units can be considered.

Executive residences can be considered.

Adverse credit can be considered

Detailed planning consent must be granted

Residential, mixed use, commercial, student, care home, industrial etc all considered.

UK countrywide coverage

What information will I need to provide?

Applicant company name & number.

Directors & significant shareholders CV’s or Biographies.

Full site/ property address.

Copy of the planning consent.

Financial Appraisal (can exclude finance costs) and Cash-Flow.

Detailed build costs.

Schedule of proposed Accommodation.

Details of the professional team (contractor, architect, structural engineer, CDM coordinator etc).

Procurement Method (For example, Design & Build or Construction Management?).

Any comparable sales information (or agent’s opinions) to support the proposed GDV.


Can the developer also act as main contractor?

Yes, provided you are sufficiently experienced.

How long does it take?

If we are given a sufficient depth of detail, we can provide Heads of Terms within 24 or 48 hours. On average it takes 6 to 8 weeks to complete a development facility thereafter. Our quickest to date though has been 1 week, where an acceptable valuation and QS report had already been commissioned.

How quick are draw-downs?

That is dependent on the lenders infrastructure, and also the availability of the monitoring surveyor or Asset Manager. The more prepared you are, the smoother a process it becomes. Often lenders can advance funds within 24 hours of the MS/ AM visiting the site.

How difficult is it to get a development facility?

That can really depend on the applicant and his/ her own professional team, as much as the lender. If information is provided in a timely fashion, and provided there are no significant surprises or deviations from the original presentation along the way, there’s no reason why a development finance application should be a chore.

Can you recommend a solicitor, or a QS?

Yes, absolutely. The most common reason for delay or frustration, is usually due to the 3rdparty professionals representing the borrower. It is essential to use experienced professionals who are familiar with what is expected from them.


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


Frequently Asked Questions

What is 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.

Do I have to pay interest each month?

No. The vast majority of Development Finance loans and lenders will build in a provision for interest, in to the facility. On the plus side, that means you don’t pay interest monthly. On the negative side, that means a sum will be deducted from the facility to cover interest.

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