Property development finance is usually in the form of a short term loan, although there is an increasing number of options available on the market to meet your requirements. They usually come in two parts, The first part is designed to help you with the purchase of a site, and in many cases, a lender will advance a percentage of a purchase price and leave you to fund the remaining amount (although lenders vary on this point).
The second part of the loan is to finance the build of the project. Generally speaking, a lender will often advance the total cost for this in stages, as and when they are completed. The lender will then certify the work and funds for each stage so you can pay suppliers. This means you will often need to have sufficient cash flow to fund the initial stages until you are reimbursed.
Property development mortgages can be used to fund a variety of activities such as property new builds, conversions, refurbishments and the redevelopment of land. While the initial funding will be based on a business plan and projected valuations, there is a growing demand for flexible property development finance. This ensures that both the lender and the borrower are able to react quickly to changes in the marketplace and new opportunities.