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.
2023-05-09 
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