Property development finance: what does a lender require from developers?
Project development in Germany rarely fails on the yield, but on equity at the right time and on a bank that understands the plan. we structure the senior finance for your residential or commercial project and approach the houses that actually lend — banks and debt funds, bank-independently under §34c GewO.
What does a lender require for property development finance?
A lender requires three things before terms are discussed at all: equity, pre-sales and phase logic. Loan-to-cost averaged 66.3 percent of total costs in the second quarter of 2026, so roughly a third has to come from the developer, directly or through subordinated capital. Pre-sales reduce the funder's risk immediately.
Property development finance: the short answers
For property development finance, a lender requires equity, pre-sales and funding that fits each phase of the project.
- What do capital providers look at in a development project? The viability of the plan, not you as a person: loan-to-cost and loan-to-value, pre-sale or pre-letting, and your track record. Each phase — land purchase, planning and building rights, construction, sales — has its own capital need and typical lender.
- What if the house bank waves the project away? That usually only means the plan does not fit that one house's standard grid. Specialist financiers and debt funds accept different risk profiles, shorter track records or higher loan-to-values — and even a first genuine developer gets capital via the right houses, approached in parallel.
- Who arranges this? Perini Finance & Property — licensed under §34c GewO for commercial property loans, 650+ banks & capital providers, we know the houses whose lending rules cover residential and commercial developments. The first-ranking senior finance is brokered by Perini; a subordinated component to close the equity gap is coordinated via licensed partners — the overall structure from a single source.
The phases — and where capital is needed
A project development runs in stages, and each stage has its own financing question. I think about financing from the end: which capital provider fits which phase, and how do the components mesh together?
Land purchase — Capital need: purchase price + incidental costs, often fast; Typical lender: bank, debt fund, short-term bridge capital. Planning & building rights — Capital need: upfront costs through to approval; Typical lender: equity, supplemented by mezzanine via partners. Construction phase — Capital need: main volume, drawn down by build progress; Typical lender: senior loan (bank / debt fund). Sales & handover — Capital need: interim financing until the sale proceeds; Typical lender: bridge capital, final settlement.
Which levers decide your terms?
Whoever provides project capital examines not you as a person, but the viability of the plan. The decisive levers:
- Loan-to-cost & loan-to-value: How much of the total costs or value is to be debt-financed? The higher the ratio, the more expensive and selective the capital.
- Pre-sale / pre-letting: Sold or let units lower the lender’s risk — and with it your terms.
- Track record: Completed projects are your strongest argument. But even the first genuine developer gets capital — via the right houses.
- Our role: we broker the loan side — the first-ranking secured senior finance — under §34c GewO. If the equity isn’t enough, I coordinate the subordinated component via licensed partners (more on that on the page Mezzanine & equity). So you get the overall structure from a single source.
When the house bank waves you away
Banks assess project risks conservatively — a rejection often only means the plan does not fit that one house’s standard grid.
Specialist financiers and debt funds accept different risk profiles, shorter track records or higher loan-to-values. we know these addresses and approach them in parallel, instead of sending you from bank to bank.
Example constellations from practice
Three typical starting situations as they regularly reach us — anonymised and simplified to show the structure. These are examples, not promised terms: interest, loan-to-value and components always depend on the specific project, the security and the capital provider.
- Project developer, house bank hesitates (New build · residential): A residential project with secured land and building rights, but the house bank requires more pre-sale than the developer can deliver at the start. Approach: senior loan via a debt fund with a lower pre-sale ratio, equity gap closed via a subordinated component from a licensed partner.
- Acquisition under time pressure (Plot · speed): An attractive plot, a short deadline to the notary appointment, a classic bank commitment too slow. Approach: short-term interim financing against the plot as security, later repaid by the long-term project financing.
- Capital from the holding (Holding · capital): A portfolio holder with a debt-free property wants to release equity for the next project. Approach: refinancing of the holding, the released amount serving as equity in the follow-on plan.
Frequently asked questions
Do you also finance smaller projects?
Yes. While the big houses target institutional volumes from double-digit millions upwards, our home is exactly the mid-sized and smaller segment that falls between the house bank and the large advisory firms.
How much equity must I bring?
That depends on the project, phase and security. Senior lenders usually expect an equity share; if that isn’t enough, the gap can be partly closed via subordinated capital — coordinated through licensed partners. we check your specific structure free of charge.
How does project capital cost compare to a normal mortgage?
More. Project finance is riskier than financing a finished, let property — and that shows in interest and fees. The more security (pre-sale, equity, track record) you offer, the cheaper it gets.
Do you also give tax or legal advice?
No. we broker financing under §34c GewO. Tax and legal questions you clarify with your tax adviser and notary — we work closely with them where needed.
Present your project to us
Message us on WhatsApp or book a 30-minute call. The first check of your plan is free.
Related pages
Commercial property finance: when should you prepare the follow-up loan?
Commercial property finance: prolongation, refinancing or top-up when the fixed-rate period ends — start 6 to 12 months ahead. Bank-independent, §34c.
Mezzanine finance for property projects: when does it pay off?
Mezzanine finance for property projects: subordinated capital as an equity substitute — cost, structure and when it pays off.
Bridge loan for property: how does bridging finance close the gap?
Bridge loan for property in Germany: bridging finance spans the gap until the sale completes or the long-term loan is in place.
Commercial mortgage in Germany: who finances purchase, holding and projects?
Commercial mortgage in Germany: acquisition, portfolio, development and bridge finance — brokered bank-independently across 650+ banks and capital providers.
Investment property loan in Germany: how do you finance buying and holding?
Investment property loan in Germany: loan-to-value for standing assets, debt service cover, portfolio finance and releasing capital. § 34c GewO.
Referral partnership for estate agents: how does the cooperation work?
Mortgage broker Germany for estate agents, developers and insurance brokers: you make the introduction, we arrange the financing — with client protection.
Editorially responsible: Olga Nikushkina — owner, §34i GewO (German mortgage brokerage), adviser register D-W-132-ZUCB-95. Specialised in German property financing with an international dimension: non-residents, foreign-currency income, cross-border workers, expats. Siegfried Perini is entered in the German intermediary register under this licence as a person directly involved in brokerage and advice (§ 11a GewO), active in real estate since 1992. Not legal or tax advice.