Following the Money: Understanding the “Why” Behind Development Finance
We know that the Yorkshire region’s entrepreneurs don’t just build bricks and mortar, they build legacies. In this month’s piece, we explore the “why” behind how development finance is assessed. It’s not about our specific lending appetites but about helping business owners across the North understand the reasoning that shapes funding decisions in property and development.
In education, there’s a concept called “learning through the understanding of the why.” It’s the idea that real understanding comes from knowing the reasons behind a process – not just memorising the steps. That’s how we approach development finance, too. Behind every loan application lies a story, and like any good Northern tale, it’s full of character, graft, and lessons learned.
When lenders assess a development deal, they’re not just checking boxes. They’re asking: Who’s behind this project? What’s their experience? And can we trust them to deliver? The story of a client’s journey, their background, experience, and local knowledge, is one of the most powerful indicators of success. But it’s not just about saying, “I’ve done this before.” Lenders want to follow the money.
That phrase might sound like something from a detective novel, but in finance, it’s the most effective way to understand a borrower’s track record. Underwriters (the people who assess credit risk) trace the flow of funds through past projects. They look at where the money came from, how it was used, and what the outcome was. Did the developer stay within budget? Were profits achieved as forecasted? Was the project finished on time and sold or refinanced successfully?
This type of financial storytelling provides lenders with a genuine understanding of how a developer manages risk. It’s not about catching anyone out – it’s about confirming that the business can turn plans into results. In the North, where businesses pride themselves on straight-talking and solid artistry, this approach fits perfectly: show us the numbers, show us the results, and we’ll trust the rest.
A key thing lenders look for is “skin in the game” – that personal investment that shows belief and commitment. Having equity in the deal demonstrates that the borrower is willing to back their own vision. Likewise, consistent repayment histories, well-managed debt, and clean project completions all strengthen a developer’s reputation.
At its heart, development finance is about stories told through numbers. Credit teams “follow the money” to understand a borrower’s experience and predict the likelihood of success in future projects. This financial narrative – tracing every pound from start to finish – enables lenders to make confident, fair, and informed decisions.
For brokers, advisers, and developers across the North, understanding this “why” is invaluable. The best intermediaries know how to unpack their clients’ stories and present them clearly, helping both borrower and lender work in sync. That’s how great partnerships are built – with transparency, trust, and a shared understanding of what makes a project, and a person, truly investable.