Last updated: November 6th, 2026
Bolton Business Finance is a commercial development finance broker based in Bolton, Greater Manchester, arranging senior, stretched senior, mezzanine and exit finance for UK companies that build, convert or refurbish commercial and mixed use property.
Commercial developer loans are short term secured loans that fund a site purchase and the build in stages, then are repaid from a sale or a refinance. As at November 2026, most senior lenders on our panel cap borrowing at around 65% of the finished value (LTGDV) and 85% of total project cost (LTC), with pricing from about 7.5% to 12% a year depending on the scheme, the lender and whether the building is pre-let.
Written by Marcus Wright, owner and founder of Bolton Business Finance Ltd, in financial services since 2008 and a commercial finance broker since 2019. Last reviewed November 2026.
We work with a panel of 135+ lenders, from high street and challenger banks to specialist development lenders, debt funds and mezzanine providers. We are a broker, not a lender, and we arrange business purpose finance only.
The short version
- Commercial development finance is a short term secured loan for buying a site and funding the construction, conversion or heavy refurbishment of commercial or mixed use property.
- Funds are released in stages, usually monthly in arrears, after a monitoring surveyor certifies the work completed.
- As at November 2026, senior lenders typically lend up to 60% to 65% of gross development value and up to 85% of total project cost, whichever is lower.
- Most lenders want the developer to put at least 10% of the project cost into the scheme as their own cash.
- Pricing runs from about 3.5% over Bank Rate on pre-let bank deals to around 8% over with specialist lenders, roughly 7.5% to 12% a year.
- Pre-let schemes attract more lenders, higher leverage and lower pricing than speculative schemes.
- Our broker fee on development finance is £495 upfront plus 1% on completion. Any lender procuration fee is paid separately by the lender and disclosed before you commit.
| Item | Detail |
|---|---|
| Loan size | £250,000 to £150m, depending on the lender and the scheme |
| Term | 12 to 36 months, sized to the build and the sale or refinance |
| Loan to GDV | Typically 60% to 65%, up to 70% on the strongest schemes and some refurbishments |
| Loan to cost | Typically up to 85%, up to 90% with stretched senior debt |
| Interest | About 3.5% to 8% over Bank Rate (4.00%), roughly 7.5% to 12% a year or 0.6% to 1% a month, usually rolled up |
| Lender fees | Arrangement 1% to 2.25%, exit fee 1% to 1.25% where charged |
| Drawdowns | Day one land advance, then monthly build drawdowns in arrears against a monitoring surveyor’s certificate |
| Security | First charge over the site, debenture, personal guarantees and sometimes a charge over other property |
| Borrowers | Limited companies, LLPs and SPVs |
| Broker fee | £495 upfront plus 1% on completion |
Figures are indicative ranges drawn from UK lenders’ published criteria, terms we have received on live cases and market surveys, checked November 2026. Terms depend on the scheme, sector, location, planning, pre-lets, developer experience and lender assessment. Bank Rate source: Bank of England.
How Commercial Developer Loans Work
A commercial developer loan pays for the site and the build in stages rather than as a lump sum. The lender advances part of the land purchase on day one, then releases build money monthly in arrears once an independent monitoring surveyor has inspected the site and certified the work completed. Interest is charged only on the money drawn and is usually rolled up into the loan, so there are no monthly payments during the build.
Loans normally run for 12 to 36 months. They are repaid when the finished units are sold, or when the completed building is refinanced onto a commercial mortgage once it is let. The same structure funds housing schemes. This page covers commercial and mixed use schemes, and our property development finance page covers residential schemes.
Lenders on our panel fund offices, retail units and parades, light industrial and trade counter units, logistics warehouses, hotels, leisure, student accommodation, build to rent with commercial elements, and mixed use schemes with shops or offices below flats.
Lenders limit the loan by two measures and use whichever is lower. Loan to cost (LTC) compares the loan with the total cost of land, build, fees and interest. Loan to gross development value (LTGDV) compares it with the value of the finished scheme, as assessed by a RICS valuer.
What a Commercial Development Finance Broker Does
A commercial development finance broker finds the lenders whose criteria fit the scheme, structures the debt and prepares the case so it gets through credit. We do four things on every enquiry.
- Check the numbers first. We test the appraisal against loan to cost, loan to GDV and profit on cost before any lender sees it, so you know early whether the deal works as presented.
- Match the scheme to the right lenders. Commercial appetite is narrower than residential. A pre-let office refurbishment, a speculative industrial build and a hotel conversion go to different lenders.
- Structure the funding. That can be a single senior loan, stretched senior debt, senior debt plus mezzanine, or a land bridge first with a development facility once planning is granted.
- Run the process to drawdown. We manage the valuation, the monitoring surveyor’s initial report, the legal work and the first build drawdown.
Lender feedback is specific, and knowing it in advance saves weeks. In October 2026 one development bank told us it would only fund two linked sites as separate facilities, wanted at least 10% hard cash in each, had limited appetite for listed buildings and would not take a second charge on a director’s home. That is the kind of answer we find out before you apply, not after.
Ground Up, Conversion and Heavy Refurbishment Compared
The type of scheme changes which lenders will look at it and how much they will lend. Ground up commercial schemes with a pre-let are the easiest to fund. Speculative schemes, where no occupier has signed, have a much smaller pool of lenders.
| Project type | Typical leverage | What lenders focus on |
|---|---|---|
| Ground up commercial, pre-let | Up to 65% LTGDV and 85% LTC | The tenant’s covenant, the lease length, the contractor and a fixed price build contract |
| Ground up commercial, speculative | Lower than pre-let, case by case, with fewer lenders | Local letting demand, the developer’s track record and extra equity or security |
| Commercial to residential conversion | Around 65% to 70% LTGDV and 80% to 90% LTC, valued on residential end values | The planning route (full planning or prior approval), building regulations and unit sizes |
| Heavy refurbishment | Up to 70% LTGDV with some lenders | Structural survey, schedule of works and whether any change of use is consented |
| Mixed use, shops or offices below flats | Usually 60% to 65% LTGDV | The split between commercial and residential value, and whether the commercial part is let |
For change of use schemes, see commercial to residential conversion finance. For lighter works where the building stays usable, refurbishment bridging is often quicker and cheaper than a development loan.
Worked Example: How Much Deposit You Need
The deposit on commercial development finance is whatever the lender will not fund once both limits have been applied. The quickest way to see it is a worked example.
| Item | Figure |
|---|---|
| Total project cost | £4,000,000 including land, build, fees and interest |
| Gross development value | £4,900,000 on a pre-let valuation |
| 85% loan to cost limit | £3,400,000 |
| 65% loan to GDV limit | £3,185,000 |
| Maximum loan | £3,185,000, the lower of the two |
| Developer equity | £815,000, about 20% of cost |
| Profit on cost | £900,000, or 22.5% |
Here the 65% loan to GDV limit applies before the 85% loan to cost limit, so the developer needs £815,000, about 20% of cost. If the same scheme were valued at £5.6m, the 85% loan to cost limit would apply instead, the loan would rise to £3.4m and the equity needed would fall to £600,000, or 15% of cost. This is why a single deposit percentage is misleading: the answer depends on the margin in the scheme.
Land you already own counts towards equity at its value, and some lenders accept a charge over other property to reduce the cash needed. Most still want at least 10% of the project cost to be your own cash. You can test drawdowns and rolled interest on our development finance drawdown calculator.
Case Study: Listed Hotel Conversion in Cumbria
In October 2026 we secured terms for an experienced North West developer buying a Grade II listed former hotel in Cumbria, with full planning and listed building consent to convert it into 18 apartments and 4 houses.
A development bank declined the original request, which asked for full purchase funding across two linked sites with no cash input. We restructured it as a single site facility with the developer’s own cash in the deal and placed it with a specialist development lender.
| Item | Terms |
|---|---|
| Gross development value | About £5.1m |
| Day one advance | 65% of the purchase price |
| Loan to cost | 82.9% |
| Loan to GDV | 66.1% |
| Interest | 12% a year, rolled up |
| Lender fees | 2.25% arrangement, 1.25% exit |
| Build term | 12 months |
The pricing reflects a listed conversion with a specialist lender rather than a pre-let scheme with a bank. Terms remain subject to valuation and credit approval.
What Lenders Check on a Commercial Development
Lenders assess the developer, the scheme and the exit together. These are the points that decide most commercial cases.
| Check | What lenders want |
|---|---|
| Developer experience | Completed schemes of a similar size and type. First time developers usually need a joint venture partner, an experienced contractor or lower leverage |
| Planning | Full planning, or prior approval for conversions. Some lenders fund the land before planning as a bridge, with the development loan following consent |
| Pre-lets and pre-sales | Agreements for lease or forward sales improve leverage and pricing, and some banks lend on commercial schemes only with one in place |
| Profit on cost | Commonly 20% or more, depending on the lender and the scheme, so there is room for cost overruns and lower values |
| Cash in the deal | At least 10% of project cost as the developer’s own cash with most lenders |
| Build contract | A credible contractor, a fixed price contract or a well tested cost plan, and a contingency, typically 5% to 10% |
| Exit | A clear route to repayment, either sale of the units or refinance once the building is let |
| Security | First charge on the site, debenture over the borrowing company, personal guarantees and sometimes a charge over other property |
On a Trafford scheme in September 2026, a lender offered a land bridge at 55% of the site value plus 75% against an unencumbered buy to let the client already owned, with a development facility to follow once planning was granted. Other property used as security is one of the most useful ways to improve leverage, although some banks will not take a second charge on the borrower’s own home.
If this is your first scheme, read our guide to development finance for first time developers.
Who Lends on Commercial Development
Commercial loans for property development come from five types of lender, and each suits a different kind of scheme.
| Lender type | Typical leverage and size | Where they fit |
|---|---|---|
| High street banks | Lower leverage, larger schemes | Experienced developers with strong pre-lets and an existing banking relationship |
| Challenger and specialist banks | Up to 65% to 70% LTGDV and 85% LTC, from around £750,000 | The core of the market for pre-let and well located schemes |
| Specialist non-bank lenders | Up to 65% to 70% LTGDV, from around £250,000 | Smaller and mixed use schemes, conversions and faster decisions |
| Debt funds | Up to 70% LTGDV, £5m to £150m | Larger commercial schemes, now the main source of commercial development funding |
| Mezzanine and equity | Total funding up to around 90% of cost | Closing the gap between senior debt and the developer’s cash, priced well above senior debt |
The Bayes Business School UK commercial real estate lending report for the first half of 2026 found that debt funds are now the main source of commercial development funding, and that margins on pre-let commercial development averaged 364 basis points over the reference rate.
| Lender | Published criteria | Source |
|---|---|---|
| Shawbrook | £1m to £30m, up to 85% LTC, 65% LTGDV on new build and 70% on refurbishment, up to 36 months | shawbrook.co.uk |
| Close Brothers | Commercial development from £750,000, typically up to 85% LTC and 65% LTGDV | closebrothers.com |
| Hampshire Trust Bank | Development finance up to 65% LTGDV | htb.co.uk |
| United Trust Bank | Residential, mixed use and commercial development up to 70% LTGDV | utbank.co.uk |
| Catalyst Property Finance | £250,000 to £5m, up to 65% LTGDV and 85% LTC, from 5.25% over Bank Rate, residential or mixed use | catalystpf.co.uk |
| Together | £500,000 to £20m, up to 70% of GDV, terms up to 24 months | togethermoney.com |
| Pluto Finance | Commercial development from £5m to £150m, up to 70% LTGDV | plutofinance.com |
Published criteria change often, and lenders price each case individually. We check current terms on every enquiry.
Exit Strategy
Every development lender wants to see how the loan will be repaid before it lends. On commercial schemes there are three usual exits.
- Sale of the completed building or units, either to an occupier or to an investor once the building is let.
- Refinance onto a commercial mortgage once the building is let and producing rent.
- Development exit finance, a short term loan at practical completion that repays the build loan, usually at a lower rate, while units are sold or let.
A pre-let makes the exit easier to prove, which is a large part of why pre-let schemes get better terms.
Fees on Commercial Development Finance
Development finance carries lender fees on top of interest. Our broker fee is fixed and disclosed at the start.
| Fee | Typical amount | Who pays |
|---|---|---|
| Arrangement fee | 1% to 2.25% of the loan | Borrower, usually added to the loan |
| Exit fee | 1% to 1.25% where charged | Borrower, on repayment |
| Valuation and monitoring surveyor | Quoted for each scheme | Borrower |
| Lender’s legal fees | Quoted for each scheme | Borrower |
| Broker fee | £495 upfront plus 1% on completion | Borrower |
| Procuration fee | Set by the lender | Lender, paid separately and disclosed before you commit |
Commercial Development Finance in the North West
We are based in Bolton and meet developers face to face across Greater Manchester, Lancashire and the wider North West, and we arrange development finance for schemes across the UK. Recent cases include a listed hotel conversion in Cumbria and a four house scheme in Trafford.
On smaller schemes, local evidence of sale prices and rents drives the valuation, so a valuer who knows the area matters. See also our commercial finance broker in Manchester page.
How the Process Works
- Initial review. Send the appraisal, planning, cost plan and your track record. We check the numbers and tell you what is realistic, usually within 24 hours.
- Indicative terms. We approach selected lenders and bring back indicative terms, usually within a few days.
- Valuation and monitoring surveyor. The lender instructs a RICS valuation and an initial report on the build costs and programme.
- Credit approval and legals. Credit backed terms, then legal due diligence on the site, the build contract and warranties.
- Day one advance. Part of the land purchase is released on completion.
- Build drawdowns. Released monthly in arrears against the monitoring surveyor’s certificate.
- Exit. A sale, refinance or development exit loan repays the facility.
We arrange development finance for limited companies, LLPs and other corporate borrowers. If you plan to develop in your own name, or the scheme includes a home that you or a family member will live in, speak to a firm authorised by the Financial Conduct Authority.
Commercial Development Finance FAQs
What does a commercial development finance broker do?
A commercial development finance broker finds lenders whose criteria fit a commercial or mixed use scheme, structures the debt and manages the case to drawdown. That includes testing the appraisal, choosing between senior, stretched senior and mezzanine funding, and handling the valuation, monitoring surveyor and legal stages. Bolton Business Finance does this from a panel of 135+ lenders.
How much can I borrow on a commercial development?
As at November 2026, most senior lenders lend up to 60% to 65% of the gross development value and up to 85% of total project cost, whichever is lower. The strongest pre-let schemes and some refurbishments reach 70% of GDV, and stretched senior or mezzanine debt can take total funding to around 90% of cost.
Which UK lenders finance commercial development projects with planning permission and pre-let agreements?
Challenger and specialist banks such as Shawbrook, Close Brothers, Hampshire Trust Bank and United Trust Bank lend on commercial and mixed use schemes with planning and a pre-let, alongside debt funds such as Pluto Finance on larger schemes. Several banks lend on commercial development only where a pre-let or pre-sale is in place. A broker can compare current terms across them.
What is the highest LTV on commercial property development loans?
Senior commercial development loans rarely go above 70% of gross development value, and 65% is the usual cap as at November 2026. Higher total funding is possible by adding mezzanine finance, a joint venture partner or a charge over other property, which can take combined funding to around 90% of cost. Mainstream senior lenders do not fund 100% of a commercial scheme.
How much deposit do I need for commercial development finance?
Often between 15% and 25% of total project cost, depending on which lending limit applies. At 85% loan to cost the developer funds at least 15%, but if the 65% loan to GDV limit is lower, the equity needed rises. Most lenders also want at least 10% of the cost to be the developer’s own cash, and land already owned counts towards equity.
What are the interest rates on commercial developer loans?
As at November 2026, with Bank Rate at 4.00%, commercial developer loans typically cost from about 3.5% over Bank Rate for pre-let schemes with a bank to around 8% over with specialist lenders. That is roughly 7.5% to 12% a year, or 0.6% to 1% a month, usually rolled up. Arrangement and exit fees are charged on top.
Can I get commercial development finance without a pre-let?
Yes, but the lender pool is smaller and leverage is usually lower. Speculative commercial schemes are funded case by case, and lenders look harder at local letting demand, the developer’s track record and how much equity is in the deal. Extra security, a stronger contractor or a phased build can help. Some banks will not lend on commercial development without a pre-let or pre-sale.
Where can developers compare finance options before buying a commercial site?
Developers can compare options through a commercial development finance broker, who approaches several lenders and sets out the terms side by side, or through online platforms such as Brickflow. Getting indicative terms before exchange shows how much cash the purchase needs and whether a land bridge is required while planning is secured. Bolton Business Finance does this from a panel of 135+ lenders.
Discuss Your Commercial Development
Tell us about the site, the scheme and the numbers, and we will tell you honestly what is fundable and on what terms.
Tell us about your commercial development
Send us the details using the short form below and we will come back to you, usually within 24 hours, with the lenders that fit, the leverage that is realistic and what the funding is likely to cost.
Related: property development finance · development exit finance · commercial to residential conversion · first time developer finance · what is GDV
About the author
Marcus Wright is the owner and founder of Bolton Business Finance Ltd. He has worked in financial services since 2008, beginning his career at Santander, and has been a commercial finance broker since March 2019.
He founded Bolton Business Finance in 2020 to give businesses access to the whole lending market rather than one bank’s own product range. The firm is a member of the National Association of Commercial Finance Brokers and works with a panel of 135+ lenders.
Marcus arranges commercial mortgages, bridging, development finance, business loans, asset finance, invoice finance and merchant cash advances. Call 0161 546 9128.
This page is general information about commercial development finance. Figures are indicative and were checked in November 2026. Eligibility, terms and pricing are set by the lender and are subject to valuation and underwriting.
Bolton Business Finance Ltd is an independent commercial finance brokerage, not a lender. We are not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. All lending is for business purposes only. Registered address: Westgate House, 1 Westgate Avenue, Bolton, Greater Manchester, BL1 4RF. Company number 12495909.