No-deposit development funding, built as a stack rather than promised as a loan

Why 100% development finance is a capital stack, not a single loan

As of June 2026, no UK lender writes one loan covering 100 percent of a development's land and build costs. Senior development finance stops at 60 to 65 percent of cost, a ceiling set by bank capital treatment rather than appetite, and everything advertised as "100% development finance" is a structure assembled above that line. The structure has three layers: senior debt to around 65 percent loan to cost (LTC, the loan measured against total project cost), mezzanine debt on a second charge taking the stack to roughly 90 percent, and JV equity covering the final slice plus working capital. Our capital stack page covers how the layers fit together; this page covers how they reach 100 percent.

The search term promises a loan; the product that answers it is closer to a partnership. The brokers ranking for this phrase, ABC Finance and Advias among them, resolve it the same way: a joint venture investor funds the equity above the debt, and the developer gives up a share of profit rather than paying interest on that slice. That is why our joint venture development finance page is the parent of this one. 100 percent funding is the JV product viewed from the developer's bank balance.

Understanding it as a stack matters practically, because each layer has its own lender, its own pricing and its own underwriting. A deal that qualifies for the senior layer can still fail at the mezzanine layer, and a deal that supports both can still be declined by every equity partner if the margin is thin. Getting to 100 percent means passing three credit processes, not one.

Who qualifies: the four tests funders apply before going to full leverage

Every funder in the stack applies the same four tests, with the equity layer applying them hardest. First, profit on cost of at least 20 percent: projected profit divided by total project cost, on an appraisal that survives scrutiny. The margin is not a nice-to-have; at full leverage it is the only buffer protecting every layer above senior, so funders decline below 20 percent rather than reprice. Second, planning permission granted or very close, because a fully geared stack cannot absorb planning risk. Third, track record: you or your contractor must have completed schemes of comparable scale, since a funder advancing 100 percent of cost is underwriting your delivery, not your deposit. Fourth, a clean site story: title, access, services and ground conditions that hold up in due diligence.

The track record test has two recognised substitutions. An experienced main contractor on a fixed-price JCT contract (the standard form building contract) moves the delivery risk onto a balance sheet the funder can assess. And a JV partner with development history effectively lends you their credibility, at the cost of a larger profit share. A first-scheme developer who brings neither should expect to fund the conventional way first, with a cash deposit, covered in our guide to how much deposit development finance requires.

The worked stack: a £2.4m GDV scheme funded with no developer cash

Take the house example we use across this site: a scheme with a gross development value (GDV, the end sales value) of £2,400,000. Land costs £600,000, build costs £1,000,000, and a 10 percent contingency adds £100,000, so hard costs are £1,700,000. The stack assembles like this. Senior development finance at 65 percent LTC provides £1,105,000 at around 8.5 percent per annum, with rolled interest and fees adding roughly £130,000 over the term. Mezzanine debt tops the stack up from 65 to 90 percent LTC: a further £425,000 on a second charge at around 16 percent per annum, costing roughly £85,000 in rolled coupon and fees because it draws later in the build. That leaves £170,000 of hard costs plus working capital headroom uncovered, call it £250,000, and a JV equity partner funds it for a profit share.

Now the waterfall at exit. The scheme sells for £2,400,000 and completes in 18 months. The senior lender takes £1,235,000 including rolled costs, the mezzanine lender takes £510,000, sales costs absorb roughly £60,000, and the equity partner's £250,000 comes back next, leaving profit of about £345,000. The partner takes a 10 percent priority return, around £37,000 over the term, then a 40/60 split in the developer's favour on the remainder is realistic for an experienced sponsor whose partner funded a small slice. The developer banks roughly £185,000 having put no cash into the deal. Less than the £500,000 the same scheme pays a developer funding the equity personally, but earned on nothing invested.

Run your own scheme through the 100% development finance calculator: it applies the senior and mezzanine ceilings to your numbers and shows the equity gap a partner would need to fill.

From the lender side: how credit committees read a fully geared deal

Having sat on the lending side at Bank of Scotland and Lloyds Banking Group, our founder's observation is that a senior credit committee reads a 100 percent structure with one question on top: who takes the first loss, and do they know it? A committee is comfortable lending £1,105,000 into a £1,700,000 cost base precisely because £595,000 of someone else's money burns before theirs does. What unsettles them is a stack where the layers above are thinly documented: a mezzanine lender with no agreed intercreditor deed, or an equity "partner" whose commitment is a heads of terms email. The committee will price the senior facility as if those layers might not fund, which means it does not approve at all.

The capital mechanics explain the 65 percent senior ceiling itself. Under PRA (Prudential Regulation Authority) slotting rules, development lending above conservative leverage attracts sharply higher capital charges, so a bank lending at 80 percent LTC must hold so much capital against the loan that the pricing stops working. That is why the layers above 65 percent are funded by mezzanine funds and equity investors who sit outside bank capital rules, and why the cliff edge in pricing between 65 and 90 percent is structural, not negotiable. We structure all three layers together, with the intercreditor positions agreed before any lender instructs valuers, because a stack assembled sequentially loses weeks at each boundary.

What full-stack funding costs against putting your own cash in

The comparison every developer should run is the same scheme funded two ways. Funding the equity yourself on the £2.4m GDV example: you invest roughly £595,000 (the gap above senior debt), pay only the senior coupon, and keep the full profit of about £430,000 after finance and sales costs. That is a 72 percent return on your cash over 18 months. Funding it at 100 percent: you invest nothing, pay the senior coupon, the mezzanine coupon and the equity partner's share, and keep roughly £185,000. The structure costs you about £245,000 of profit on this scheme. That is the honest price of the leverage.

The price is worth paying in two situations, and only two. When you do not have the cash, the comparison is not £185,000 versus £430,000, it is £185,000 versus a scheme that never happens. And when your cash is finite and your pipeline is not: £595,000 of your own equity funds one scheme conventionally, or anchors partial contributions across three schemes funded with stacked debt and partner equity, each paying you a developer's share. Three times £185,000 beats one £430,000. The arithmetic of recycling capital is the real argument for full-stack funding, not the absence of a deposit.

The profit share trade-off, stated plainly

Above 90 percent of cost, the funding stops being debt and starts being equity, and equity is paid in profit share, not interest. What you give up follows the partner's position in the repayment queue: they stand behind the senior lender and the mezzanine lender with no contractual right to repayment, so their expected return has to be 25 to 35 percent per annum equivalent across a portfolio in which some schemes return them nothing. On a small equity slice like the £250,000 in our worked example, that means a priority return of 8 to 12 percent per annum plus 30 to 50 percent of residual profit depending on your track record and who sourced the deal. On a full JV where the partner funds the entire equity requirement, expect the split to move further toward them.

The negotiating lever is rarely the split itself. Partners price risk, so improving the evidenced GDV case, fixing the build price or shortening the programme moves their terms more than arguing percentages. The other lever is reducing the slice you need: a stretch senior facility at 85 to 90 percent of cost from a single lender shrinks the equity gap before any partner conversation starts, and on some schemes eliminates the profit share entirely in favour of a higher coupon.

No deposit development finance: what the search means and what exists

"No deposit" and "100 percent" are the same intent wearing different clothes, with one useful distinction: no deposit means no cash, not no contribution. Funders going to full leverage still require you to bring something, and the recognised currencies are land, planning gain and additional security. Land you already own counts at current value: a site bought at £400,000 and consented to a £600,000 valuation contributes £600,000 of equity without a pound of new cash, and on our worked example that single contribution covers the entire equity layer with room to spare. Planning gain you created is the same mechanism: the uplift is your deposit, earned rather than saved.

Additional security is the third route: a first or second charge over unencumbered property you own, supporting the development facility. It avoids profit share because it is collateral, not investment, but it puts an existing asset genuinely at risk and lenders apply conservative values to it. The full set of contribution options, and what each does to your terms, is covered in our deposit guide; the equity-partner route specifically is the subject of the development equity page.

Three routes to 100% of project costs, June 2026

Indicative shapes and pricing across the UK market as of June 2026. Every route prices on profit on cost, track record and scheme specifics, so treat these as the realistic band, not a quote.

Ranges are indicative, as of June 2026, and depend on profit on cost, track record, scheme size, build contract and location at the time of introduction.

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