The success of property development projects often depends on the method of finance used. Projects that need fast access to capital need finance methods that can accommodate this need, such as auction finance. Alternatively, smaller projects that need flexibility above all else would likely benefit from a revolving line of credit.

Though these finance methods have their advantages, they aren’t always appropriate. They require the property developer to pay a percentage of the cost, which isn’t always possible. 100% development finance, also known as joint venture development, can be the path forward in these cases.

What is 100% development finance?

100% development finance is a method of capital raising that can fund projects without developers contributing their own money. The lender assumes the entire cost and gains a percentage of the profits upon the sale of the property. While this percentage is often a 50/50 split, the agreed-upon percentage differs between lenders. In addition to splitting profits, some lenders will charge interest on the sum provided. This is not always the case, however, as most lenders are satisfied with a percentage of the profits from the sale of the property.

What is needed to obtain 100% development finance?

Given the risk posed by 100% development finance, only seasoned property developers with a successful track record will be able to acquire this form of finance. In addition to this, there are a few criteria that developers must meet in order to be eligible.

Firstly, developers looking to secure 100% development finance must ensure they have full planning permission. 100% development finance is already a notable risk for lenders, and it’s highly unlikely that you will find any prepared to assume additional planning risk.

Alongside full planning permission, property developers will need to demonstrate profitability in their projects. Lenders aren’t likely to waste their investment capital on a project with minor returns. For many lenders, only projects with a minimum gross development value (GDV) of £1 million will be considered. The percentage return on this value differs from lender to lender, but a margin of roughly 30% is a good benchmark. If your project can meet these values and has full planning permission, the likelihood of your application being seriously considered is high.

The last requirement is a personal guarantee. As we’ve mentioned, 100% development finance is a risky business for lenders, and so they take pains to minimise their assumed risk. One such risk mitigation factor is to require a personal guarantee from applicants. This means that you will declare yourself personally liable for a portion of the debt if the project fails to be profitable. Personal guarantees are usually capped, though, as with most things, it varies from lender to lender. This cap is usually around 20% of the total funding.

What documents are required for 100% development finance?

In addition to meeting the above criteria, a successful application will require you to submit several documents. These are:

  • Your development CV
  • Evidence of full planning permission
  • A complete breakdown of the project’s costs
  • A complete breakdown of the project, including planning documents, timeframes, and so on
  • A reasoned estimate of the property’s value
  • A completed application form for your chosen 100% development finance provider

With all this information provided, and the above criteria met, your chosen finance provider will be able to properly consider your application. Assuming you have a carefully planned, profitable project in mind, you stand a good chance of getting your project funded.

Increasing your odds of a successful application

As with any application, there are factors that will increase or decrease your chance of success. Namely, risk and detail are the main points that can influence your application’s success, even if you otherwise meet the criteria and provide the necessary information.

In your application, you should endeavour to include as much relevant detail as possible. Your lender wants to know the project as well as possible, and so including every piece of relevant information is crucial. Your aim should be to ensure your potential lender is left asking few questions, if any, after examining your application. If too much is left unsaid, it might be taken as evidence that your ability to handle the project is lacking.

In addition to providing detail, your next aim should be to assure your potential lender that your project is low-risk. You should demonstrate that the property will be developed to a high standard, with little risk of construction issues. Similarly, you must demonstrate that there is a market for your project, and that the finished product will be easy to sell at a good price.

To achieve both of these aims, you should try to sell the project to your potential lender. This is easier than it sounds; something about the project has appealed to you, so your job is to explain your vision to your potential lender, and why that vision is a good deal. Your presentation skills will need to be up to scratch, and you should include reliable hard data to support what you have to say. The more detail you add, the more convincing your pitch. In turn, this will greatly increase your odds of a successful 100% development finance application.

Obtaining 100% development finance without a profit share

You might find yourself eligible for 100% development finance, but would rather not profit share with your development partner. Though these cases aren’t the norm, this will not exclude you from 100% development finance.

In this instance, you will need to provide assets to be used as security. Essentially, this will make it function similar to a secured loan. You will be exempt from having to pay a deposit and profit share, but this will mean you assume the risk associated with secured loans. If you can’t pay back the debt, you stand to lose your assets. Without this additional security, you won’t be able to avoid a profit share.


100% development finance is a viable method of raising the capital required to fund your development projects. A successful application is contingent upon highly detailed plans and evidence of low risk. It is, however, only available to seasoned property developers, as lenders are not willing to lend to unproven developers, given the risk of this type of finance. As such, less experienced developers will need to look to other methods, such as bridging finance.