You can raise capital for property development through bridging loans, commercial mortgages, development finance, equity investors, and crowdfunding – each offering different levels of speed, flexibility, and control.
Raising capital is one of the biggest hurdles for any property developer – whether you’re looking to take on your first refurbishment or managing a multi-unit build. The right funding at the right time can make the difference between a smooth project and expensive delays.
In this guide, we explore the best ways to raise capital for property development in the UK.
Debt vs Equity: Understanding Your Choices
Before exploring funding options, it’s important to understand the two main routes to raising capital:
- Debt finance: Borrowing money (from banks, bridging lenders, or other sources) that you repay with interest.
- Equity finance: Raising funds by offering a share in your project or business, sharing both the risks and the rewards.
Many developers use a combination of both. But if you’re looking speed, flexibility and minimal external input, debt finance might be for you.
Debt Finance Options For Property Developers
1. Bank Loans
These loans are normally used by established developers with good credit histories.
Banks offer relatively low interest rates, but approvals are slow, and the criteria are strict. This makes them better for low-risk, long-term projects.
2. Commercial Mortgages
These loans are designed for buying income-generating commercial properties, like retail units or office buildings. Lenders look at the viability of the investment rather than the income of the person driving it.
For a commercial mortgage, it’s important to have your exit strategy written out and ready to go.
3. Property Development Finance
Specifically for larger projects, property development finance is often released in stages to match key milestones in a project like land acquisition, foundation work, or roof completion.
The amount you can borrow is normally based on the Gross Development Value (GDV) – the expected value of the project once completed.
4. Buy-to-Let Mortgages
Buy-to-let mortgages are best for developers focusing on rental yields rather than quick resale. They’re generally long-term and can be a good option if the property is income-producing.
5. Bridging Loans
When time is of the essence, bridging loans are the best option. Designed for short-term use (usually up to 15 months), they allow you to move fast on property purchases, auction deals or refinance opportunities.
At Blue Square Capital, we specialise in bespoke bridging loans crafted for ambitious property developers who need fast, flexible solutions.
Why Choose Bridging Loans from Blue Square Capital?
- Fast approvals and completions
- Loan amounts from £250,000 to £2,000,000
- Up to 70% LTV of the open market value (OMV)
- Both 1st and 2nd charge options available
- Terms up to 15 months
- No exit fees, no red tape
Our direct access to decision-makers means less waiting around and more doing.
Whether you’re buying land, funding a renovation, or bridging the gap before long-term finance, we offer a fast service with expert support.
Want to speak to someone today? Get in touch with our lending team for a no-obligation quote.
Equity Finance Options For Property Developers
Private Investors & Business Angels
These people invest in return for equity or a share of profits. They can also offer mentorship or strategic advice. Personal connections or networking events can be a great way to meet the right investor.
Joint Ventures
Partnering with another party (often another developer or investor) allows you to pool resources, with each party contributing different strengths – for example, funding versus hands-on project management.
Syndications
In a syndicate, a project sponsor raises money from several investors who share in the ownership and profits. It’s good for large-scale projects but involves navigating legal and regulatory requirements.
Crowdfunding
Online platforms let you raise smaller amounts from many investors. You’ll need a compelling pitch, solid branding, and a clear breakdown of risks and returns.
What Investors and Lenders Want to See
Whether you’re looking to raise debt or equity, there are six things nearly every funder looks for:
Protect Their Capital: Investors want to know their money is safe. Can you provide security or collateral? What’s your backup plan if things go wrong?
Promise Realistic Returns: Don’t overpromise. Conservative projections are more credible than inflated figures.
Prove Your Potential: Show your business plan, experience, and team. If this is your first project, talk about relevant skills or partnerships.
Procure a Great Deal: The numbers must make sense. A well-priced opportunity with strong return potential is key.
Provide a Track Record: A portfolio of past successes builds confidence. If you don’t have one yet, partner with someone who does.
Promote Relationship Building: People invest in people. Strong relationships and trust are just as important as spreadsheets.
Need help structuring your deal? At Blue Square Capital, we work closely with developers to tailor each loan to your project goals. Speak to our team now.
Tips for First-Time Developers
Starting out? Here are a few tips to make raising capital easier:
- Use your own funds first: Show commitment and reduce the amount you need to borrow.
- Refinance existing assets: Unlock equity from other properties.
- Build your network: Attend events, connect with brokers, and stay visible in the industry.
- Polish your pitch: Be prepared to present your numbers, your plan, and your exit strategy clearly.
- Leverage expert advice: A good broker or financial partner can make all the difference.
Raising Capital For Property Development
Raising capital for property development doesn’t have to be hard. By understanding the range of options available – and working with the right funding partner – you can access the capital you need to bring your vision to life.
While traditional loans and equity partnerships have their place, bridging finance is one of the most powerful tools in a developer’s toolkit. And with the right lender behind you, it can unlock speed, flexibility, and opportunity that traditional routes simply can’t match.
Blue Square Capital is here to help you move fast, secure funding, and succeed. Let’s build something extraordinary together.
Why Blue Square Capital?
At Blue Square Capital, we specialise in unregulated bridging finance for residential, commercial, and mixed-use developments across England and Wales.
With direct access to high-net-worth individuals and family offices, we can secure funding for complex projects with minimal fuss. We cut out the red tape, offering tailored solutions with no exit fees and swift decision-making.
We offer more than just finance – we offer partnership. Get in touch with Blue Square Capital today and take the first step toward funding your next successful development.
