Secure a construction loan to keep your project moving
Construction finance helps UK developers and contractors fund materials, labour and equipment before project income begins. Compare flexible options from 85+ lenders with Funding Options by Tide, an FCA-regulated credit broker.
Last updated: November 2025, edited by Joe Morley, reviewed by Vivek Seda
What is construction finance and how it works
What is construction finance?
Construction finance is a form of specialist funding designed to support the development, renovation or extension of residential and commercial property. It typically covers:
Land acquisition
Material costs
Labour and subcontractors
Professional fees
Stage-by-stage build costs
Cash flow during construction
Depending on your needs, construction finance may include:
Asset finance for equipment
Bridging loans for short-term funding
These options allow you to release funds in stages as the build progresses, giving you control over budget and timelines.
How does Funding Options work?
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We’ll ask a few questions about your business and the reason for your loan.
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Why construction businesses need funding
Construction firms and developers often rely on finance to manage cash flow, ensure continuity and support business growth.
Common reasons include:
Purchasing materials or paying suppliers upfront
Funding specialist machinery through asset finance
Managing cash flow gaps via invoice finance
Covering labour costs and subcontractor fees
Financing the purchase of land or property
Funding builds for clients who pay in stages
Access to reliable funding helps ensure projects stay on track, avoid delays and remain fully operational.
How to negotiate your first development construction loan
Three main areas
When applying for a loan for a new UK construction project, there are three areas where you may have room to negotiate the terms of your loans: interest rate, staged drawdown, and the length of the facility. Given that many building companies will be tied up in lengthy projects that require finance for staged payments, for example, a concrete firm laying poured concrete in an apartment.
Interest rate
The interest rate you secure with a lender will greatly impact the overall profitability of your development project. With a comprehensive business plan that conscientiously demonstrates your ability to deliver on previous projects and a meticulous understanding of the minutiae of the construction costs and timelines, you can secure a low-interest rate. In addition, you can ask for the interest to be “rolled up” so it only becomes payable upon completion of the loan term or settlement, whichever comes first.
Staged drawdown
This type of lending for construction allows you to take money from your facility when you need it. Hence, you won’t have to pay any interest on the balance.
Length of facility
It’s almost guaranteed that there will be project overruns, even if the most experienced team is working on a project with tight scheduling. By extending the time you have to pay back your facility, you will have more flexibility to repay the loan without paying interest penalties for early settlements.
Trusted by over 17,000 customers
Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ UK lenders in minutes
We scan the market so you don’t have to, finding the right option for your business.
Trusted by 17,000+ UK businesses
From startups to established SMEs, we’ve already helped secure over £1bn in funding.
FCA-regulated and Tide-backed
We operate as a credit broker, not a lender, giving impartial access to multiple finance products.
Excellent customer experience
Our Trustpilot rating is 4.8 out of 5, based on 1,300+ independent reviews.
Personalised support
Our team can guide you through the process and help you choose the finance that fits your needs.
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
Monthly payments
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Total interest
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
Learn more about construction finance
How much can I borrow?
Most lenders offer between £25,000 and £20 million depending on experience, profitability, planning status and project strength.
Do I need planning permission?
In most cases yes, especially for development finance. Some lenders may consider bridging loans without permission if planning is likely.
How long does it take to get funding?
Approval can take between 48 hours and 3 weeks depending on project complexity and lender requirements.
What if the project overruns?
Most lenders allow extensions or refinancing, but it’s best to plan contingencies and forecast timelines carefully.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Vivek Seda
Business Finance Manager
Vivek is the Asset Based Lending Manager at Funding Options by Tide. Vivek has been in the industry for over 10 years, working for both lenders and brokers. His product specialisms cover Asset Finance, Invoice Finance, Property Finance and structured transactions.