Build & conversion
Development Finance for Clinical, Residential and Mixed-Use Schemes
Land and build funding drawn in stages against surveyor-certified progress, sized on the finished value rather than on today’s.
The proposition
Funding sized on what the scheme will be worth
Development lending works differently from every other facility on this site. Rather than lending against the property as it stands, the funder underwrites the gross development value on completion, then releases money in tranches as a monitoring surveyor certifies each stage of work.
That structure means a scheme can proceed with a comparatively modest cash contribution — commonly the land, or around 25% to 35% of total costs — with the build itself funded up to 100%. Interest is rolled up, so nothing is serviced while the site is producing no income.
For healthcare clients, the most frequent scheme is a conversion: retail or office space taken to clinical use, or a large residential property turned into a multi-surgery practice. Those projects need a lender comfortable with change of use and with a specialist end value.
Scheme types
What we fund
Experience counts heavily in this market. A first-time developer will need a strong professional team and a contractor with a track record; an established developer with completed schemes behind them will access better leverage and finer pricing.
Every facility needs an exit — a sale, or a refinance onto a commercial mortgage or buy to let facility once the scheme is complete and income producing.
- Ground-up residential and mixed-use development
- Conversion of retail, office or residential property to clinical use
- Purpose-built dental, medical and veterinary premises
- Permitted development and change of use schemes
- Heavy refurbishment where structural work is involved
- Site assembly and land purchase with planning in place
Client outcomes
How the structure protects the scheme
Cash contribution minimised
Build costs funded in arrears against certified work means capital is not tied up in a site for eighteen months before it earns.
Nothing to service mid-build
Rolled-up interest keeps the scheme cash-neutral until practical completion, when the exit repays capital and interest together.
Cost overruns anticipated
A contingency built into the facility at the outset, sized with the quantity surveyor, avoids the mid-build funding crisis that kills schemes.
At a glance
Indicative terms
- Leverage
- Up to 70% of gross development value, or up to 90% of total project cost. Stretched senior and mezzanine available.
- Build costs
- Up to 100% funded, drawn in tranches against monitoring surveyor certification.
- Term
- 6 to 36 months, set to the build programme plus a sales or refinance period.
- Interest
- Rolled up and settled at redemption. Nothing payable during the build.
- Experience
- First-time developers considered with a proven contractor, a full professional team and detailed planning.
- Requirements
- Planning consent, a costed schedule of works, a professional team and an evidenced exit strategy.
Related funding lines
Questions
Development Finance — frequently asked questions
Not as a development facility. Lenders need consent in place because the gross development value depends on what can actually be built. Where you are buying a site ahead of a planning decision, a bridging loan secured on the land is the usual route, refinanced onto development funding once consent is granted.
The land element is drawn at completion. Build costs are released monthly or at agreed milestones, after a monitoring surveyor appointed by the lender inspects and certifies the work completed. Drawings are therefore in arrears, which is why an initial contribution to get the first stage underway is always required.
Extensions are common and usually granted where the delay is explicable and the exit remains sound, though there will normally be a fee and continued interest. The protection against this is a properly sized contingency — typically 5% to 10% of build cost — agreed at the outset rather than negotiated under pressure at month fourteen.
Next step
Have a site or a scheme in mind?
Send the planning position, the costed schedule of works and your professional team. You will get an appraisal of the leverage available and the total cost of funding it.
Prefer to write? Send an enquiry or email info@apexfundingpartners.co.uk.