Development Finance with Limited Personal Guarantees for 12 Houses

Every development project has different funding priorities. While some developers need maximum leverage, others focus on securing competitive pricing, flexible lending terms and reduced personal risk.

In this case study, Positive Commercial Finance arranged Development Finance with Limited Personal Guarantees for an experienced developer building a gated community of 12 new homes in the South East.

The Opportunity

Our client secured an option on a development site, subject to planning permission.

Once planning consent was granted, the scheme was approved for 12 detached houses within a gated community.

The developer had an excellent track record and was able to purchase the land outright before contributing significant funds towards the early stages of construction.

The Challenge

The client required a development finance facility capped at 55% Loan to Gross Development Value (LTGDV), with interest and lender fees included within the overall funding structure.

However, cost was not the only priority.

The developer also wanted to minimise their personal exposure by limiting the scope of any Personal Guarantees (PGs). In addition, they wanted a lender that offered transparent pricing without unnecessary exit or non-utilisation charges.

Finding a lender willing to combine all of these requirements required a carefully targeted approach.

Our Solution

Positive Commercial Finance approached specialist development finance lenders with experience of supporting established developers.

We identified several competitive options before helping the client select the lender that best matched their objectives.

The chosen facility offered:

• A competitive fixed interest rate.
• No exit fees.
• No non-utilisation fees.
• Personal Guarantees limited solely to interest shortfalls and cost overruns.

This structure allowed the developer to secure funding while keeping personal risk to a minimum.

Deal Structure

• Loan to Gross Development Value (LTGDV): 55%
• Funding of Total Project Costs: 69%
• Interest Rate: 6.5% per annum (fixed)
• Arrangement Fee: 1.5%
• Exit Fee: None
• Term: 18 months
• Personal Guarantees: Limited to interest shortfalls and cost overruns

The Result

The developer secured a flexible funding package that aligned with both the financial and commercial objectives of the project.

By limiting Personal Guarantees and removing exit fees, the facility reduced unnecessary risk while providing competitive funding for the development.

This case study demonstrates how Development Finance with Limited Personal Guarantees can be structured for experienced developers seeking flexible, cost-effective funding rather than simply maximising borrowing.