Stretched Senior Development Finance
Stretched senior development finance is a single facility that gears higher than conventional senior debt — typically up to 90% of total cost and 75% of gross development value — removing the need for a separate mezzanine layer and the intercreditor negotiation that comes with it. It prices between roughly 9.5% and 13% per annum, above senior debt but usually below the blended cost of senior plus mezzanine, and suits experienced developers running several schemes who want their equity working across more than one site. One lender, one legal process, one drawdown schedule.
Criteria and pricing
What lenders on our panel will typically do on this product today.
- Loan to cost
- Up to 90%
- Loan to GDV
- Up to 75%
- Rate
- ≈ 9.5% – 13% p.a. on the drawn balance
- Arrangement fee
- 2%; exit fee 1% – 2% of loan or GDV
- Term
- 12 – 30 months
- Loan size
- £1m – £30m typically
- Profit on cost
- 20%+ required, stressed at a 10% GDV fall
- Experience
- Two or more comparable completed schemes
- Exit
- Unit sales or refinance onto investment debt
Worked example — £6m GDV scheme, stretched vs senior + mezzanine
- Total cost
- £4,400,000
- Stretched senior at 88% of cost
- £3,872,000
- Developer equity required
- £528,000
- Blended rate
- ≈ 10.5% p.a.
- Alternative: senior at 70% GDV
- £4,200,000 capped by GDV
- Alternative: mezzanine top-up
- £350,000 at 16% p.a.
- Finance cost, stretched, 20 months
- ≈ £560,000
- Finance cost, senior + mezz, 20 months
- ≈ £600,000 plus second legal set
Figures are typical UK market ranges as at 2026 and are indicative only — your terms depend on the asset, the exit and the lender we place the case with.
Who this works for — and who it does not
You are likely to qualify if
- A developer with at least two completed schemes of similar scale and unit type
- Detailed planning consent and a fixed-price or costed build contract
- Profit on cost of 20% or more, holding up under a 10% GDV reduction
- A credible sales strategy with local comparable evidence
- SPV borrower with personal guarantees and a cost-overrun undertaking
This is the wrong product if
- First or second schemes — the gearing depends on your track record, not the site
- Thin-margin schemes where the higher coupon consumes the profit
- Developers who would be better served putting in more equity at a lower rate
- Sites without detailed consent
What actually happens, and when
- Week 1
Appraisal and gearing test
We model stretched senior against senior plus mezzanine on your actual numbers, so the choice is made on blended cost rather than headline rate.
- Week 1–2
Terms
Heads of terms from lenders whose stretched product genuinely reaches your location and unit type.
- Week 2–5
Valuation, QS and credit
Red book valuation and an initial monitoring surveyor report; credit committee typically within a fortnight.
- Week 5–9
Legals and drawdown
One facility, one set of security documents — the main practical saving over a mezzanine structure.
Frequently asked
Request indicative terms
Four details are all a lender needs to price a case: how much, what secures it, when you need it and how it is repaid. Send those and we come back with realistic terms — or tell you plainly that the case will not place.
Request indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.