Development Finance for First-Time Developers
The most common question we hear from people doing their first scheme is a worried one: will any lender back me with no development track record? The honest answer is yes, first-time developers raise development finance every week, but the terms, the leverage, and the level of scrutiny are different from what an experienced developer sees.
This guide explains what UK development lenders actually require from a first-time developer, how to compensate for a lack of track record, what terms to expect, and the reasons first-timers most often get declined. If you are new to the product itself, start with How Development Finance Works; this page focuses on the experience question.
Can a First-Time Developer Get Development Finance?
Yes, but the lender is underwriting two things at once: the scheme and you. With no completed projects to point to, you carry more of the perceived risk, so lenders manage that in three predictable ways:
- Lower leverage. Where an experienced developer might reach 70-75% of total cost, a first-timer is often capped nearer 60-65% LTC, meaning you need more cash in the deal.
- A higher rate. First-time schemes usually price toward the top of the range. See Development Finance Rates & Fees for where that sits.
- More conditions. Expect closer quantity surveyor monitoring, a stronger contractor requirement, and a more heavily evidenced exit.
None of this is a barrier on its own. It simply means the deal has to be structured so the lender's caution is answered before they have to ask.
What Lenders Actually Look For
Development lenders are not really betting on you personally; they are betting that the scheme will complete on budget and sell or refinance for the projected value. As a first-timer you close the experience gap by making everything else as strong as possible.
- A realistic, professionally costed scheme. The single biggest red flag is a build budget that does not stack up. Get your costs priced properly before you apply, because the QS will review them and an optimistic cost plan undermines your credibility immediately.
- An experienced main contractor. This is the most powerful lever a first-timer has. A capable contractor on a fixed-price contract effectively lends you their track record. Lenders are far more comfortable when the person actually building the scheme has done it many times.
- A credible, evidenced exit. Whether you plan to sell or refinance, show the lender comparable sales, agent appraisals, or an agreed refinance route. A vague exit caps your leverage faster than a thin CV does.
- Cash in the deal. Genuine equity (your own funds, not borrowed deposit) reassures the lender that you are committed and gives a buffer if costs run over.
- Clean planning. Full planning permission with conditions understood and discharged removes a major uncertainty. Lenders will not advance against works that breach planning conditions.
- Personal standing. Clean credit, transparent background, and any relevant trade, surveying, or construction experience all help, even if it is not formal development experience.
How to Compensate for No Track Record
The experience gap is real, but it is bridgeable. The strongest first-time applications do at least one of the following:
Bring in an experienced contractor or project manager. As above, this is the most effective single move. A reputable contractor with a fixed-price JCT contract transfers a large part of the delivery risk away from your inexperience.
Partner or joint venture with an experienced developer. A JV with someone who has a completed track record can unlock both better terms and higher leverage, because the lender is underwriting their experience alongside your equity. Even an informal mentor named on the application can help.
Start with a smaller, simpler scheme. A modest residential new-build or a light conversion is far more fundable for a first project than a complex multi-unit or change-of-use scheme. Lenders reward schemes where less can go wrong.
Accept lower leverage. Putting in more equity is sometimes the quickest route to a yes. It reduces the lender's exposure and signals commitment.
Use a broker who knows the first-timer lenders. Appetite for first-time developers varies enormously between lenders. Some specialist funds and challenger banks actively support new developers with the right scheme and contractor; others will not look at a first project at all. Applying to the wrong lender wastes weeks and risks a decline on file.
Typical Terms for a First Scheme
Treat these as indicative; actual terms depend on the scheme, your contractor, and your exit:
| Feature | Experienced developer | First-time developer |
|---|---|---|
| Max LTC | 70-75% | typically 60-65% |
| Interest rate | bottom of range | toward top of range |
| Contractor requirement | flexible | usually a strong, experienced contractor required |
| QS monitoring | standard | often closer, more frequent |
| Exit evidence | standard | more heavily scrutinised |
The mechanics of the facility itself are the same as any development loan: funds are drawn in stages against QS-certified progress, and interest is charged only on the drawn balance, not the full facility. The four ratios that decide how much you can borrow (LTV, LTC, GDV and LTGDV) are explained in LTC vs LTV vs GDV vs LTGDV.
Worked Example: A First-Time Scheme
Consider a first-time developer with a simple two-unit residential new-build:
- Total project cost (land plus build plus fees): £600,000
- Projected GDV (completed value): £900,000
- Maximum at 65% LTC: £390,000
- Maximum at 65% LTGDV: £585,000
- Maximum loan = £390,000 (LTC is the binding constraint)
That leaves the developer needing roughly £210,000 of equity into the £600,000 of cost. The lender's comfort here comes less from the developer's CV and more from a tidy scheme, a strong contractor, clear comparables supporting the £900,000 GDV, and the meaningful equity stake. The same scheme with an experienced developer at 72% LTC could borrow around £432,000 and need less cash, which is the practical cost of being new.
(Figures are illustrative. Your actual terms depend on the lender, the scheme, and how the deal is structured.)
Why First-Time Developers Get Declined
The common reasons are avoidable:
- An unrealistic build budget that the QS picks apart.
- No experienced contractor, leaving the lender with delivery risk on both sides.
- A weak or unevidenced exit, especially an optimistic GDV with no supporting comparables.
- Too little equity, asking the lender to carry too much of a first project.
- An over-ambitious first scheme, such as a complex conversion or large multi-unit build.
- Applying to the wrong lender, one with no appetite for first-time developers, which wastes time and leaves a decline on record.
Frequently Asked Questions
Can I get development finance with no experience at all?
Yes, it is possible, but you will need to compensate elsewhere: an experienced main contractor, a credible evidenced exit, a clean planning position, and usually more equity and lower leverage than an experienced developer would need. Pairing with an experienced contractor or a JV partner is the most effective way to bridge the gap.
How much deposit does a first-time developer need?
Because first-timers are often capped nearer 60-65% LTC rather than 70-75%, you typically need to fund around 35-40% of total project cost yourself. On a £600,000 scheme that is roughly £210,000 of genuine equity. More equity often improves both the chance of approval and the rate.
Will I pay a higher rate as a first-time developer?
Usually, yes. First-time schemes tend to price toward the top of the development finance range, reflecting the additional perceived risk. A strong contractor, low leverage, and a well-evidenced exit are the levers that bring pricing down. See Development Finance Rates & Fees.
Does a strong contractor really make that much difference?
It is the single biggest factor a first-timer controls. An experienced main contractor on a fixed-price contract transfers much of the delivery risk away from your inexperience, which is exactly the risk a lender is worried about. Many first-time approvals hinge on the strength of the build team.
Getting Your First Scheme Funded
The difference between a first-time decline and a first-time approval is usually structure, not luck: the right scheme size, the right contractor, a defensible GDV, enough equity, and crucially the right lender for a new developer. We know which development lenders genuinely back first-time developers and what each of them needs to see.
Get in touch with your scheme details (land cost, build cost, projected GDV, your contractor, and your exit plan) and we will give you an honest view of whether it is fundable, the likely terms, and which lenders to approach. For the wider picture, start with the Development Finance Hub or read How Development Finance Works.