What’s the Difference Between Development Funding and Refurbishment Finance?

If you’re not familiar with the complexities of commercial finance, sometimes finding the correct funds can be a confusing process. This is evident in the FAQs we see.

Key hanging outside of front door

A common question industry professionals are asked is what is the difference between development finance and commercial property refurbishment funding. Our brokers will outline the key differences between these two popular options and explain the need-to-know info below.

The Main Differences Between Commercial Property Refurbishment and Development Finance

The Extent of the Works

Development finance refers to works from the ground up that will require certain permissions, whether this is building one or more properties from scratch or large-scale extensions to current structures. It may also be used to purchase the land on which the development will be built.

Whereas refurbishment would refer to the renovation or restoration of current structures where there is no need to seek planning permission. This could mean anything from a lick of paint to a thorough refurnish of fittings and fixtures which will be an improvement on the current condition.


Confusion comes when a project may involve moving walls or some form of structural work, however general common sense can be applied here: if this work represents a small portion of the property, refurbishment finance should suffice. For larger jobs, a financial broker may suggest development funds instead.

Value of the Loan

As building a property is considerably more expensive than simply renovating an existing structure, development finance tends to revolve around large volumes of money i.e. £100,000 and up. On the flip side, renovation loans tend to be provided for smaller scale projects and therefore are lower in value.

Length of the Loan Period

As refurbishments are less extensive than developments, they usually will take less time to complete. As a result, refurbishment terms tend to be shorter than development funding ones, lasting just 6 months to a year.

Not Sure What Finance You Need?

Of course, the easiest way of deciphering what kind of finance you need is to simply ask an expert. Give our office a call on 02920 766 565 to discuss your requirements with one of our trained commercial finance brokers, who will be able to present you with your loan options.

Alternatively learn more by exploring out development finance and refurbishment finance pages.

Article By Ben Lloyd

October 23rd, 2017

Ben is the Director and Co-Founder of the Pure Group and Managing Director of Pure Property Finance.

Following a career in Barclays, where Ben was in the real estate finance team for 8 years, he decided that the market needed a more forward-thinking type of commercial brokerage so founded Pure Commercial Finance (now Pure Property Finance), the first company within the Pure Group.

Ben has extensive experience across the real estate sector and has participated in over £2bn of real estate transactions during the course of his career.

Ben oversees the general strategy at Pure Group and works with the senior leadership team to drive the Group forward. Ben is also on the Executive Committee of FIBA.

See more articles by Ben

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