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100% of the build costs offered on bungalow conversion

100% of the build costs offered on bungalow conversion

The client: A self-employed builder from Kent looking to undertake his first property development project using borrowed funds. As a building contractor the client has experience of property extensions and renovations for his clients, but has never carried out a project personally.

The project: To split a large bungalow he had recently purchased for cash into two smaller bungalows. Planning permission has already been granted.

The finance: As the bungalow was owned outright by the client, the finance was only required to cover the build costs with the exit strategy being to sell both properties to repay the loan.

There were a few challenges in placing this case:

  1. The client hadn’t borrowed for any development works in the past, so was unable to provide any evidence of successful business projects personally

  2. The client had never written a business plan before and would need one to help secure finance

  3. The client was looking to achieve 100% of the build costs

We took the time to get to know the client, his building business and his plans for the conversion of the bungalow. It quickly became clear to us that the client would stand a good chance of securing funding with a high street lender as long as the loan proposal was fully supported by a comprehensive business plan. So, we worked closely with him and put together a plan which included details of his contracting business (accounts, tax returns, examples of projects carried out for clients, testimonials, etc), a detailed timeline of works, copies of the necessary planning consent, and projected sale figures. 

So impressed with the client and his proposal the bank offered 100% of the build costs and a land loan of £155,000 for future developments which had not been requested by the client!

The funds will be drawn down in tranches which will be agreed upon receipt of invoices and site visits from the bank's relationship manager. Agreeing to release funds in this way is extremely rare for a high street lender, but a real benefit for the client as it means saving on architect’s certificates and independent monitoring surveyors.

Property Details

Property value: £400,000

Gross development value: £710,000

Loan facility:

Build costs: £135,000 (plus interest rolled up)

Land cost: £155,000 (plus interest rolled up)

LTV: 43%

Rate: Bank Rate (currently 0.25%, variable) + 3.75%

Term: 12 months

Facility fee: 1.25% (£3,625)

Exit fee: 1.25% (£3, 625)

ConsultantPaul Keddy01732 471655


This is just one example of how we have helped secure finance for a client. If you have a similar scenario or something you'd like us to look at please get in contact with us on 0345 345 6788 or contact me directly at


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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.