Property developments often unfold in stages, whether you’re building several homes across different plots or managing phased commercial refurbishments. Securing the right development finance is crucial, but structuring it effectively for a multi-phase project requires careful planning.
Here’s how phased development finance works, how lenders assess it, and how you can improve your chances of securing the right funding.
1. What Is Multi-Phase Development?
A multi-phase development involves breaking a project into distinct stages. For example:
- Phase 1: Site preparation and infrastructure
- Phase 2: Initial housing or commercial units
- Phase 3: Final build, landscaping, or upgrades
These phases may be built, marketed, and sold separately, making the timing of funding and cash flow especially important.
2. Why Standard Finance Doesn’t Always Work
Traditional development loans release funds in tranches based on milestones, but multi-phase projects may:
- Run over a longer period
- Require separate planning approvals
- Depend on the sale or rental income from earlier phases to fund later ones
Without the right structure, you could face delays, increased costs, or even funding gaps.
3. How to Structure Finance for Multi-Phase Projects
Successful development finance for phased builds involves:
- Staged Drawdowns: Funds are released at key build milestones, usually verified by a surveyor.
- Rolling Finance: One facility may cover the entire project, or separate loans may fund each phase.
- Exit Planning: Repayment may come from property sales, refinancing, or long-term rental income.
- Contingency Planning: It’s vital to plan for cost overruns or market delays between phases.
Work closely with your mortgage advisor to model the cash flow across phases and secure a facility that aligns.
4. What Lenders Look For
To support multi-phase development, lenders will want to see:
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Full project timeline and phase breakdown
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Planning approvals or expected dates
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Pre-sales, reservations, or local demand data
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Costings and cash flow forecasts
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A clear exit for each phase
They may also want flexibility to revalue or restructure between phases.
5. Why Use a Specialist Advisor
At Cotterell & Cotterell, we understand the complexity of phased developments. We work with lenders who offer tailored funding models, helping you:
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Secure flexible development finance
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Manage drawdowns and stage reporting
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Plan effective exits for each build phase
We’ll support you from feasibility to final sale, with clear advice every step of the way.
📞 Planning a multi-phase project? Get in touch to discuss your funding options.