Glossary definition
Loan to Cost
A lending metric that expresses the total loan amount as a percentage of the total project costs including land, construction, professional fees, and finance costs. Loan to cost (LTC) is used alongside LTGDV to size development finance facilities, with typical senior debt LTC ratios of 80-90% of total costs.
Definition
A lending metric that expresses the total loan amount as a percentage of the total project costs including land, construction, professional fees, and finance costs. Loan to cost (LTC) is used alongside LTGDV to size development finance facilities, with typical senior debt LTC ratios of 80-90% of total costs. It provides a different perspective from LTGDV by focusing on the developer's input costs rather than the end value.
See also
Closely related terms.
LTGDV (Loan to Gross Development Value)
A key lending metric in development finance that expresses the total loan amount as a percentage of the gross development value of the completed scheme.
LTV (Loan to Value)
A lending ratio that expresses the loan amount as a percentage of the current market value of the property being used as security.
Build Cost
The total cost of construction works on a development project, typically including materials, labour, preliminaries, and contractor margins.
Capital Stack
The total structure of funding used to finance a development project, arranged by seniority from senior debt at the bottom through mezzanine finance to developer equity at the top.
Further reading
Guides that touch this term.
Guide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readReadGuide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readReadGuide
Development Finance Application Checklist: Documents You Need
A comprehensive checklist covering every document lenders require for a development finance application, from development appraisals to contractor tenders and planning evidence.
11 min read readRead
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