Joint Venture Development Finance for a £7.8 Million Residential Development

Positive Commercial Finance specialises in arranging Joint Venture Development Finance for property developers who want to undertake larger residential developments without tying up their own capital. This case study demonstrates how we secured 100% development funding for an experienced developer, allowing them to deliver a £7.8 million residential scheme while preserving cash for other projects.

The Challenge

Our client is an experienced property developer based in the North of England with a strong track record of delivering residential developments using an established third-party building contractor.

The developer had identified an exciting residential scheme with a Gross Development Value (GDV) of £7.8 million, comprising:

• A mix of three-bedroom family homes
• Nine two-bedroom apartments

Although the project was commercially attractive, the developer was already progressing three other developments simultaneously. As a result, all available capital had been committed to existing projects, leaving no funds available to purchase the site or finance construction.

The client required:

• 100% funding for land acquisition and development costs
• No personal cash contribution
• Funding for all professional fees and project costs
• A competitive profit-sharing structure
• A fast decision so the project could move forward without delay

Traditional development finance providers were unable to meet these requirements due to the lack of developer equity.

Our Solution

Positive Commercial Finance sourced a Joint Venture Development Finance facility that provided 100% funding for all project costs, eliminating the need for the developer to contribute any cash.

The funding package covered the land purchase, construction costs, professional fees and finance costs, while also including a monthly developer management fee throughout the project.

Thanks to our extensive experience in arranging Joint Venture Development Finance, we identified the most suitable funding partner quickly. Heads of Terms were agreed and the transaction entered the legal process within just 7 days.

Deal Structure

• Gross Development Value (GDV): £7,800,000
• Loan Amount: £5,084,880
• Arrangement Fee: 2%
• Interest Rate: 9.25% per annum
• Term: 24 months
• Profit Share: 60% Developer / 40% Funder
• Funding: 100% of land purchase, build costs and professional fees
• Developer Management Fee: Included

The Outcome

The developer secured 100% Joint Venture Development Finance without investing any personal capital, allowing the project to proceed while maintaining liquidity across three other live developments.

The bespoke funding solution covered every aspect of the development, including acquisition costs, construction, professional fees and an ongoing management fee for the developer.

This case demonstrates how Joint Venture Development Finance can provide experienced developers with an alternative to traditional development finance when cash is committed elsewhere or higher leverage is required.