How to Get Development Finance and Cover 100% of Your Costs


Have you ever missed out on a really great opportunity because all your capital was tied up elsewhere?

If you have, you’re not the only one. This is a common problem for SME developers. Luckily, there’s a solution: getting finance that covers 100% of your development costs.

Everyone knows that equity is difficult to come by. Given this, you might ask whether 100% finance is actually available. If equity is hard to get at the best of times, how are you meant to get it when you can’t demonstrate to investors that you have skin in the game?

The short answer to this question is: yes, 100% finance is definitely available. At Mackenzie Byrne, we regularly and consistently source 100% finance for developers.

Here’s what you need to do to get 100% finance for your development project.

Show funders who you are

When you ask a funder to invest in a project to which you’re not committing your own capital, you’re asking them to take on more risk than usual. To counteract this extra risk, you need to be able to show funders that they can have confidence in you. There are 4 ways to do this:

  1. Demonstrate your experience. Your experience as a developer is vital to the success of your finance application. Show funders you understand the industry and know what you’re doing. If you haven’t yet acted as a principal and completed development projects, don’t worry – you can also cite experience gained in employment (e.g. as a project manager)
  2. Lay out your track record. You need to be able to show funders that you have successfully completed similar projects in the past (again, this can be as a developer or as an employee/contractor)
  3. Explain why you don’t have capital available. You don’t have to come up with complicated reasons for this. Simply explain that all your capital is tied up in other projects, or that you’re just starting out and haven’t accumulated any capital yet
  4. Produce a Net Asset Statement You may not need capital to get 100% finance, but funders will want to see that you have a strong enough Net Asset Statement to satisfy a personal guarantee

When you’re able to demonstrate your experience and track record, explain why you don’t have available capital, and produce a strong Net Asset Statement, you’ll almost be ready to approach funders with a finance application. But first, you’ll need to prepare yourself for what funders may require from you.

Anticipate funders’ requirements

Typically, development finance is made up of two components: senior debt and equity. If you’re unfamiliar with these terms, check out our blog on understanding the capital stack. A basic funding model might look like this:

  • Senior Debt – up to 90% of costs
  • Equity – the remaining proportion of costs

(Note: while senior debt is usually provided by lenders and equity by investors, a single funder will sometimes provide both and finance 100% of your project costs.)

Senior Debt

Before applying for senior debt, you need to be able to initially cover the costs of your lender’s due diligence process. This will include a valuation, a Project Monitoring Surveyor’s report, and your lender’s legal fees. You may also need to cover a portion of your lender’s commitment/arrangement fee. These fees will be repayable to you on completion of the transaction and/or on the first development draw-down.

Don’t worry about needing to cover these same costs for your equity provider – often, equity providers will ‘piggy back’ on senior lenders’ due diligence.

You will also be required to give a personal guarantee to your senior debt lender. Usually, this will be 20-25% of the capital amount. Sometimes, it might take the form of a cost-overrun guarantee and an interest guarantee. Equity providers may or may not require a personal guarantee.


When looking for equity, consider the following sources:

  • High Net Worth Individuals
  • Family Offices
  • Property Funds/Institutions
  • Private Equity Funds

There is no standard structure for an equity deal. Most deals are bespoke, and yours will likely reflect your experience and your equity provider’s evaluation of their risk/reward metrics. Be prepared to negotiate on the following possible deal structures:

  • A 50:50 profit share
  • A coupon of 5-10% p.a. to the equity provider, followed by a profit share
  • A preferred return to the equity provider
  • Combinations of the above with incentives to maximise your performance

Prepare Well

Equity providers can act very quickly, but on a first deal there will usually be a detailed due-diligence process. If you are looking to secure 100% finance, our recommendation is that you allow 12 weeks from offer to completion.

However, you can shorten the length of the deal cycle by preparing well. For example, at Mackenzie Byrne, we invest significant amounts of time in compiling necessary background information before introducing our clients to equity partners. By doing this, we deal with the “getting to know you” part of the process before the time-critical deal cycle begins.

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