Development Finance Calculator
Estimate the maximum development finance facility from GDV and loan-to-cost, and the cash you would need to find.
Calculator
Development Finance Calculator
Estimate the maximum development finance facility from GDV and loan-to-cost, and the cash you would need to find.
Gross development value, the end value once complete.
Loan to GDV cap, often around 60% to 65%.
Loan to cost, often up to around 90%.
This excludes finance costs, professional fees and contingency, and lenders usually retain interest so the net day-one advance is lower than the headline facility. This is an estimate only, not a quote or an offer of finance.
How a development finance facility is sized
Development lenders cap the loan by two separate tests, and lend against whichever gives the lower figure: a percentage of the gross development value (GDV), the expected value once the scheme is finished and sold, and a percentage of total cost, the loan-to-cost (LTC) ratio.
The loan-to-GDV cap protects the lender if the finished value comes in lower than expected, while the loan-to-cost cap ensures the developer has meaningful equity or profit tied up in the scheme. Whichever of the two produces the smaller loan is usually the effective ceiling on what a lender will advance.
Any gap between the total cost and the maximum facility has to be found from the developer's own funds, or a second layer of finance. Profit on cost, the gross profit as a percentage of total spend, is a common quick check lenders and developers both use to judge whether a scheme has enough margin to be worth the risk.
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