If you don't have a deposit, a development finance lender will always need to assess other potential risks associated with your property development carefully.

In a standard development finance loan, the lender takes a charge over the property, whether that's a plot of land, building for renovation, or commercial unit.

The borrower pays a deposit or uses the equity in the property as a deposit source, so if anything goes wrong, the lender can repossess the premise and sell it to recoup the lending they're still outstanding.

In development finance, the risk is much greater. That's because the property probably won't be in a finished state and might not be worth as much as the gross development value anticipated once the development work is complete.

Therefore, a no deposit scenario is even riskier since if the lender advances 100% of the value of the work, they might be left with ownership of a property that isn't worth as much as the borrower paid for it.

Hence, the need to ensure your property developer finance application is robust, with built-in contingencies, comprehensive budgets, and complete plans to specify precisely what works you're planning and how much the property is expected to be worth.

Below we'll run through some of the key criteria a lender will analyse in this situation.

Every lender is different, so they'll all have varying policies and criteria that they'll need any applicant to meet before they can approve a development finance application.

The below list summarises the general borrower criteria you're likely to encounter:

• Experience - lenders prefer to lend to borrowers with property development experience. If you're applying as a business or trader, they'll want to see your trading history and past portfolio projects.
• Property type - some developments are more attractive than others. It's essential to check that the property will generate sufficient profit to make it a viable return before you apply.
• Planning permission - if you have planning permission in place before applying, you stand a much higher chance of approval.
• Valuations - an appraisal carried out by an independent valuer will help support your anticipated profit figures. However, a lender will usually require a separate valuation by their own agent; but investing in an appraisal before applying is an excellent way to demonstrate that your projected returns are achievable.
• Exit strategy - developer finance is a short-term financing product designed to assist developers in covering the costs of developing a property - and sometimes, a proportion of the initial outlay to buy the land or premise. Having a solid exit strategy to show how you expect to repay that finance helps mitigate the risk of having no deposit.

Don't worry if you don't meet these criteria since specialist lenders can offer flexibility with their requirements.

Give Revolution Brokers a call if you're concerned about being a new developer, for example, and we'll steer you through the best financing options.

It is possible, but not always easy, to secure developer finance without a deposit - the vital factor is ensuring that every other aspect of your project plans is watertight and demonstrates an excellent opportunity for the lender to make a reasonable return.

Providing supporting information, thorough plans, comprehensive budgeting, and independent valuations all help prove that your project is well thought out, with few risks that it won't go to plan.