Joint Venture Finance Scotland & UK

100% Development Funding for Property Developers

Joint venture (JV) finance is used for developing property without having to use your own funds, as a lender can provide the finance for the purchase of the land as well as fund the entire construction costs.

In return, the lender will be looking for a 50/50 split on profits and charge approximately 1% interest per month.

However, this is a very specialist product only available to property developers and projects that meet a JV lender’s strict criteria such as:

• A certain level of experience in development is required. Therefore, this isn’t an option available to first-time developers
• Minimum of 25% margin on GDV (pre-finance cost), ideally over 30% to ensure everyone makes a return
• Requires full planning in place, as no lender would take on any planning risk
• Available for the development of affordable housing, but not luxury homes

At Capital 8 Finance, we help experienced property developers across Scotland and the UK access joint venture finance from £500,000 to £10 million+, enabling projects to proceed with zero deposit when profit margins are strong.

What is Joint Venture Development Finance?

Joint venture finance is a profit-share funding model where a specialist lender provides 100% of the capital required for a development project (land acquisition + build costs) in exchange for a share of the profit—typically 50/50.

Unlike traditional debt finance (where you pay interest and fees but keep all the profit), JV finance means:

• No deposit requiredfrom the developer
• No monthly interest payments(interest is rolled into the profit split)
• The lender shares the risk(and reward) with you
• You retain operational controlof the project (subject to lender oversight)

How Joint Venture Finance Works

Traditional Development Finance:

• Developer provides 25-35% deposit
• Lender provides 65-75% of costs
• Developer pays 7-10% interest + fees
• Developer keeps 100% of profit after debt repayment

Joint Venture Finance:

• Developer provides 0% deposit
• Lender provides 100% of costs (land + build)
• Lender charges ~1% per month interest (rolled up)
• Developer and lender split profit 50/50after all costs

Key Features

• Loan amounts:£500,000 to £10 million+ (larger facilities available for substantial projects)
• Funding:100% of land acquisition + 100% of build costs
• Profit split:Typically 50/50 (negotiable for exceptional projects or developers)
• Interest rate:Approximately 1% per month (~12% per annum), rolled into profit calculation
• Security:First charge over the development site
• Term:12-24 months (aligned with development timeline)
• Arrangement fees:1-2% of total facility
• Developer contribution:£0 deposit, but developer must cover professional fees (legals, surveys, QS reports)

When Do You Need Joint Venture Finance?

Joint venture finance is ideal when:

• You have a strong project but no deposit—the numbers work, but you lack the 25-35% equity required for traditional development finance
• You want to preserve cashfor other opportunities or operational needs
• Your profit margin is 30%+—high enough to share 50/50 and still make a strong return
• You’re an experienced developerwith a proven track record (minimum 3-5 completed developments)
• You have full planning permissionin place (JV lenders will not take planning risk)
• Your project has strong exit potential—clear route to sell completed units or refinance
• You want to scale quicklywithout tying up equity in a single project

Types of Projects Funded

Residential Development

• New build housing estates (affordable housing preferred)
• Apartment block conversions
• Urban infill developments
• Townhouse schemes
• Semi-detached and terraced housing

Specialist Projects

• Social housing developments
• Affordable housing schemes (preferred by many JV lenders)
• Mixed-tenure developments (affordable + market sale)
• Build-to-rent schemes (with pre-agreed exit buyer)

Projects NOT Typically Funded

• Luxury or high-end residential(most JV lenders prefer affordable/mid-market)
• Commercial developments(offices, retail—JV lenders focus on residential)
• Projects without planning(outline planning is not sufficient)
• First-time developer projects(minimum 3-5 completed developments required)
• Projects with margins under 25%(insufficient profit to share)

Geographic coverage: Projects across Scotland, England, and Wales

Real-World Example: How Joint Venture Finance Works

The Project

• Type:12-unit new build affordable housing development in Glasgow
• Land cost:£400,000
• Build costs:£1,600,000
• Total project costs:£2,000,000
• Gross Development Value (GDV):£3,000,000
• Gross profit:£1,000,000 (33% margin on GDV)

Without Joint Venture Finance (Traditional Development Finance)

• Developer deposit required:£600,000 (30% of costs)
• Senior debt:£1,400,000 at 8% for 18 months = £168,000 interest
• Net profit to developer:£832,000 (£1,000,000 gross – £168,000 interest)
• ROI on developer’s £600k:139% over 18 months

Problem: Many developers don’t have £600,000 available.

With Joint Venture Finance

• Developer deposit:£0
• JV lender provides:£2,000,000 (100% of land + build costs)
• JV lender charges:1% per month = £20,000/month x 18 months = £360,000 interest (rolled up)
• Total costs (including rolled interest):£2,360,000
• Gross profit:£640,000 (£3,000,000 GDV – £2,360,000 total costs)
• Profit split (50/50):£320,000 to developer, £320,000 to lender

Cost-Benefit Comparison

Traditional development finance:

• Developer invests: £600,000
• Developer profit: £832,000
• Net return: £832,000 on £600k invested (139% ROI)

Joint venture finance:

• Developer invests: £0
• Developer profit: £320,000
• Net return: £320,000 on £0 invested (infinite ROI, but lower absolute profit)

When Does JV Finance Make Sense?

JV finance is better when:

• You don’t have the £600k deposit
• You want to do multiple projects simultaneously (preserve cash)
• You’re happy with £320k profit for zero capital at risk

Traditional finance is better when:

• You have the £600k deposit available
• You want to maximize absolute profit (£832k vs. £320k)
• You’re comfortable with the capital risk

Eligibility Criteria

Joint venture lenders have strict criteria due to the 100% funding and profit-share model:

Developer Experience

• Minimum 3-5 completed developments(some lenders require 5+)
• Proven track recordof delivering projects on time and on budget
• Experience in the specific project type(residential new build preferred)
• No major adverse credit(CCJs, bankruptcies, or repossessions will disqualify most applicants)

Project Viability

• Minimum 25% gross profit margin(pre-finance costs), ideally 30%+
• Full planning permission in place(not outline—detailed/full approval required)
• Realistic GDVsupported by comparable sales evidence from RICS-registered valuer
• Credible build costsbacked by quantity surveyor reports
• Strong exit strategy—pre-sold units, housing association off-take, or clear market demand

Planning & Approvals

• Full planning permission(outline is not sufficient)
• All conditions dischargedor easily dischargeable
• No Section 106 obligationsthat would erode profit margins
• Building regulations approval(or clear path to approval)

Property Type

• Affordable housing preferred(social housing, shared ownership, Help to Buy)
• Mid-market residential(£150k-£300k per unit)
• Not luxury or high-end(most JV lenders avoid properties over £400k per unit)

Financial Position

No developer deposit required, but you must cover:

• Legal fees (£3,000-£10,000)
• Valuation and monitoring surveyor fees (£2,000-£5,000)
• Quantity surveyor reports (£2,000-£5,000)
• Planning and architect fees (if not already paid)

Adequate cash reserves for contingencies (typically 5-10% of build costs held in reserve by lender)

Why Choose Capital 8 Finance for Joint Venture Finance?

Specialist Lender Access

At Capital 8 Finance, we have access to the UK’s specialist joint venture finance providers, including:

• Specialist JV lenders– 100% funding for experienced developers with strong projects
• Alternative finance providers– Creative structures when traditional JV isn’t suitable

Whole-of-Market Broker Expertise

As an independent broker, I’m not tied to any single lender or product. I assess your project objectively and recommend the most cost-effective solution—whether that’s joint venture finance, traditional development finance, mezzanine finance, or a combination of structures.

Transparent Advice

• Honest assessment—I’ll tell you if joint venture finance is right for your project or if traditional development finance would be more profitable
• Clear cost breakdowns—you’ll understand exactly what you’re paying and what profit you’ll retain before proceeding
• No obligation—initial consultation is free, and you’re under no pressure to proceed

Structured Approach

1. Initial consultation—understand your project, development experience, and profit margins
2. Viability assessment—review GDV, costs, exit strategy, and planning status
3. Lender selection—match your project to the most suitable JV providers through my principal firm’s panel
4. Application support—prepare detailed submissions with all required documentation
5. Negotiation—work to secure the best profit split and terms (some lenders offer 60/40 or 55/45 for exceptional projects)
6. Completion support—coordinate with solicitors, valuers, and monitoring surveyors to ensure smooth drawdown

Joint Venture Finance vs. Alternative Solutions

Joint Venture Finance vs. Traditional Development Finance

Traditional Development Finance:

• Developer provides 25-35% deposit
• Lender provides 65-75% of costs
• Developer pays 7-10% interest + fees
• Developer keeps 100% of profit after debt repayment

Best for: Developers with capital who want to maximize profit

Joint Venture Finance:

• Developer provides 0% deposit
• Lender provides 100% of costs
• Lender takes 50% of profit (plus ~1% monthly interest rolled up)
• Developer keeps 50% of profit

Best for: Developers without capital who want to scale quickly

Joint Venture Finance vs. Mezzanine Finance

Mezzanine Finance:

• Developer provides 10-15% deposit
• Senior lender provides 65-70%, mezzanine lender provides 15-20%
• Developer pays 7-9% on senior debt + 12-18% on mezzanine
• Developer keeps 100% of profit after debt repayment

Best for: Developers with some capital who want to reduce deposit but keep full profit

Joint Venture Finance:

• Developer provides 0% deposit
• JV lender provides 100% of costs
• Developer shares 50% of profit

Best for: Developers with zero capital and projects with 30%+ margins

Joint Venture Finance vs. Private Equity

Private Equity:

• Equity partner provides 100% of costs
• Equity partner typically takes 60-70% of profit
• Equity partner may want board seats and operational control

Best for: Large-scale projects (£5m+) or developers seeking long-term partnerships

Joint Venture Finance:

• JV lender provides 100% of costs
• JV lender takes 50% of profit
• Developer retains operational control (subject to lender oversight)

Best for: Single projects with experienced developers who want to retain control

Frequently Asked Questions

What’s the minimum project size for joint venture finance?

Most JV lenders require a minimum facility of £500,000, which typically means total project costs (land + build) of at least £500,000 and a GDV of £750,000+ (to achieve the required 25-30% profit margin).

For smaller projects (under £500k), traditional development finance or bridging finance may be more appropriate.

Can first-time developers access joint venture finance?

No. JV lenders require a minimum of 3-5 completed developments. The 100% funding model means the lender is taking significant risk, so they need confidence in the developer’s ability to deliver on time and on budget.

If you’re a first-time developer, focus on securing traditional development finance (with a 25-35% deposit) or bringing in a joint venture partner with development experience.

How quickly can joint venture finance be arranged?

Typically 8-12 weeks from application to drawdown, assuming:

• Full planning permission is in place
• All documentation is ready (planning, QS reports, valuations, comparable sales evidence)
• The developer has a strong track record

The timeline can be shorter (6-8 weeks) for experienced developers with straightforward projects, or longer (12-16 weeks) if planning conditions need to be discharged or if there are valuation complications.

What profit margin do I need for joint venture finance?

Minimum: 25% gross profit margin (pre-finance costs)

Ideal: 30%+ gross profit margin

Why?

After deducting the lender’s rolled-up interest (~12% per annum) and splitting the remaining profit 50/50, both parties need to make a sufficient return.

Example:

• GDV: £2,000,000
• Costs: £1,500,000
• Gross margin: 25% (£500,000)
• Rolled interest (18 months): £270,000
• Net profit: £230,000
• Split 50/50: £115,000 each

Result: £115,000 profit for the developer on zero investment is acceptable, but not exceptional. At 30% margin (£600k gross profit), the developer would net £165,000 after the 50/50 split—much more attractive.

Do I need planning permission in place before applying?

Yes—full planning permission is required. Outline planning is not sufficient.

JV lenders will not take planning risk because:

• They’re providing 100% of the funding
• Planning refusal would result in total loss
• Delays in planning discharge erode profit margins

What you need:

• Full/detailed planning permission granted
• All major conditions discharged (or easily dischargeable)
• Building regulations approval (or clear path to approval)

Can I negotiate a better profit split than 50/50?

Sometimes. The standard split is 50/50, but some lenders offer:

• 55/45 (developer/lender)for exceptional projects (30%+ margins, pre-sold units, experienced developer)
• 60/40 (developer/lender)for very low-risk projects (housing association off-take, social housing, strong pre-sales)

Conversely, some lenders require:

• 40/60 (developer/lender)for higher-risk projects (first-time using JV finance, lower margins, secondary locations)

Negotiation factors:

• Your development track record
• Project profit margin (higher margin = better split for you)
• Exit strategy (pre-sold units = better split for you)
• Property type (affordable housing = better split for you)
• Location (prime locations = better split for you)

What happens if the project runs over budget or timeline?

JV lenders typically include:

• Contingency reserves(5-10% of build costs) held back for overruns
• Extension options(usually 6 months) at an increased interest rate (typically +1-2% per month)
• Step-in rightsif the project fails—the lender can take control to protect their position

If you need to extend beyond the initial term:

• Higher interest rates during the extension period (1.5-2% per month instead of 1%)
• Additional arrangement or extension fees (typically 1-2% of facility)
• More frequent monitoring and reporting requirements
• Potential renegotiation of profit split if delays are significant

If the GDV is lower than expected:

• The profit margin shrinks, affecting both parties
• The lender may require additional capital injection from the developer
• In extreme cases, the lender may require the project to be sold at a loss, with losses shared proportionally

Is joint venture finance regulated?

No. Joint venture finance is commercial lending secured against development projects, so it falls outside FCA regulation.

This means:

• No FCA protections apply (unlike residential mortgages)
• Lenders have more flexibility in terms and pricing
• Professional standards still apply through industry bodies

Can I use joint venture finance for luxury or high-end developments?

Rarely. Most JV lenders prefer affordable or mid-market residential (£150k-£350k per unit) because:

• Faster sales (higher demand)
• Lower market risk (less affected by economic downturns)
• Easier exit (more buyers in this price range)

Luxury developments (£500k+ per unit) are typically:

• Slower to sell
• More affected by market fluctuations
• Require longer marketing periods
• Have smaller buyer pools

Exception: Some JV lenders will fund luxury developments if:

• Units are pre-sold or have strong buyer interest
• The developer has a proven track record in luxury developments
• The location is prime (central London, Edinburgh New Town, etc.)
• The profit margin is 35%+ to compensate for higher risk

What are the typical interest rates for joint venture finance?

Joint venture finance typically costs 1% per month (~12% per annum), which is rolled up (added to the loan balance) until project completion.

Why is this higher than traditional development finance (7-10%)?

• The lender is providing 100% of the funding (higher risk)
• The lender is sharing the profit (so the interest is part of the overall return calculation)
• The interest is rolled up (no monthly payments), so it compounds

Total lender return:

• 1% per month interest (rolled up) = ~12% per annum
• 50% of net profit after interest
• Combined return:typically 15-25% per annum for the lender

Do I pay interest monthly or is it rolled up?

Interest is always rolled up in joint venture finance. There are no monthly payments.

Structure:

• No monthly interest payments during the build
• Interest compounds and is added to the loan balance
• Total debt (principal + rolled interest) is deducted from sale proceeds
• Remaining profit is split 50/50 (or per agreed split)

Example:

• Loan: £2,000,000
• Interest: 1% per month for 18 months = £360,000 (rolled up)
• Total debt at exit: £2,360,000
• Sale proceeds: £3,000,000
• Net profit: £640,000 (£3,000,000 – £2,360,000)
• Developer receives: £320,000 (50%)
• Lender receives: £320,000 (50%) + £360,000 interest = £680,000 total

Can I get joint venture finance for projects in Scotland?

Yes. Joint venture finance is available for projects across Scotland, including Glasgow, Edinburgh, Aberdeen, Dundee, and other cities and towns.

Scotland-specific considerations:

• Scottish legal system requires solicitors familiar with development finance and profit-share agreements
• Valuation and monitoring surveyors must be RICS-registered and familiar with the Scottish market
• Exit routes (sale or refinance) should be realistic for the Scottish property market
• Affordable housing demand is strong in Scotland, making it attractive to JV lenders

I’m based in Dundee and work with developers across Scotland, so I understand the local market dynamics and can connect you with appropriate lenders, solicitors, and surveyors.

What documentation do I need to apply for joint venture finance?

Project documentation:

• Site address and legal title
• Full planning permission (not outline—detailed/full approval required)
• All planning conditions and discharge status
• Architect’s drawings and specifications
• Quantity surveyor’s cost report (detailed breakdown)
• Comparable sales evidence for GDV (from RICS valuer)
• Build programme/timeline (with key milestones)
• Marketing strategy and exit plan

Developer documentation:

• CV and development experience summary (with photos/evidence of previous projects)
• Details of previous projects (addresses, costs, GDV, profit achieved, timelines)
• Last 3 years’ personal tax returns
• Last 3 years’ company accounts (if developing through a company)
• Last 3 months’ personal and business bank statements
• Credit report (clean credit essential—adverse will disqualify most applicants)

Financial projections:

• Detailed profit and loss forecast
• Cash flow projection (showing drawdown schedule and sales phasing)
• Sensitivity analysis (showing profit at -10% GDV or +10% costs)

What’s the difference between joint venture finance and a joint venture partnership?

Joint Venture Finance (JV Finance):

• Lender-borrower relationship—you’re borrowing money, not taking on a partner
• Developer retains operational control—you make all decisions (subject to lender oversight)
• Fixed profit split—typically 50/50, agreed upfront
• Lender has security—first charge over the property
• Lender has step-in rights—can take control if project fails
• Single project focus—arrangement ends when project completes

Joint Venture Partnership (JV Partnership):

• Equity partnership—partner owns a share of the project entity
• Shared operational control—partner may have board seats and decision-making rights
• Negotiable profit split—can be 50/50, 60/40, 70/30, etc.
• Partner has equity stake—not secured debt
• Partner shares losses—if project fails, partner loses their equity
• Potential long-term relationship—may extend to multiple projects

Which is better?

• JV Finance:If you want to retain full control and the relationship is purely financial
• JV Partnership:If you want a strategic partner who brings expertise, contacts, or additional value beyond capital

Can I use joint venture finance if I have adverse credit?

No. JV lenders require clean credit because they’re providing 100% of the funding.

Adverse credit that will disqualify you:

• CCJs (County Court Judgments)
• Bankruptcies or IVAs
• Repossessions
• Defaults over £1,000
• Late payments in the last 12 months

Why is JV finance stricter than traditional development finance?

• The lender is providing 100% of the capital (higher risk)
• The lender is relying entirely on your ability to deliver the project
• There’s no developer equity at risk to ensure commitment

Alternative if you have adverse credit:

• Focus on traditional development finance (some lenders accept adverse if you have a strong track record and larger deposit)
• Bring in a joint venture partner with clean credit
• Wait 3-6 years for adverse to age off your credit file

How do I know if joint venture finance is right for my project?

Ask yourself:

1. Do I have a strong project with 30%+ profit margin?
2. Do I have full planning permission in place?
3. Do I have 3-5 completed developments under my belt?
4. Do I lack the 25-35% deposit required for traditional development finance?
5. Am I comfortable sharing 50% of the profit in exchange for zero capital at risk?

If you answered yes to all five, joint venture finance is likely a good fit.

If you answered no to any:

• No to #1 (low margin):Traditional development finance may be more profitable
• No to #2 (no planning):Wait until planning is granted
• No to #3 (inexperienced):Build your track record with traditional finance first
• No to #4 (you have capital):Traditional development finance will give you higher absolute profit
• No to #5 (want to keep full profit):Use traditional or mezzanine finance instead

Contact me for a no-obligation assessment.

What happens at the end of the project?

Step 1: Project completion

• Units are completed and ready for sale or occupation
• Building regulations sign-off obtained
• Snagging completed

Step 2: Exit strategy

• Option A:Sell completed units on the open market
• Option B:Sell to housing association or registered provider (if affordable housing)
• Option C:Refinance onto buy-to-let mortgages (if holding for rental income)

Step 3: Debt repayment

• Sale proceeds are used to repay the JV lender’s capital + rolled interest
• Example:£2,000,000 loan + £360,000 rolled interest = £2,360,000 repaid

Step 4: Profit distribution

• Remaining proceeds are the net profit
• Example:£3,000,000 sale proceeds – £2,360,000 debt = £640,000 net profit
• Split 50/50: Developer receives £320,000, lender receives £320,000

Step 5: Final accounting

• Solicitors distribute funds to both parties
• Final accounts are prepared and agreed
• Project is formally closed

Can I do multiple projects with joint venture finance simultaneously?

Yes—this is one of the key benefits of JV finance. Because you’re not tying up your own capital, you can take on multiple projects at once.

Example:

• Project 1:£2m JV finance, 18-month build, £320k profit to you
• Project 2:£1.5m JV finance, 15-month build, £240k profit to you
• Project 3:£2.5m JV finance, 20-month build, £400k profit to you

Total profit over 2 years: £960,000 with zero capital invested

1. Traditional finance:

• You’d need £600k deposit per project = £1.8m total capital
• Most developers don’t have £1.8m available to deploy across three projects simultaneously

Key advantage: JV finance allows you to scale quickly without capital constraints.

How to Apply for Joint Venture Finance

Step 1: Initial Consultation

Contact me to discuss:

• Your project details (type, location, GDV, costs, profit margin)
• Your development experience and track record
• Your planning status (full permission required)
• Your exit strategy (sales timeline, buyer profile)

Step 2: Documentation Required

• Project details:Site address, full planning permission, architect’s drawings
• Financial projections:Build costs (QS report), GDV (comparable sales evidence), profit forecast, cash flow projection
• Developer experience:CV, details of previous developments (with photos/evidence of completed projects)
• Planning:Full planning permission, conditions discharge status, Section 106 obligations
• Personal financials:Last 3 years’ tax returns, bank statements, credit report (clean credit essential)
• Legal:Proof of site ownership or acquisition contract

Step 3: Lender Selection & Application

I’ll:

• Match your project to suitable JV lenders through my principal firm’s panel based on size, location, experience, and property type
• Prepare a detailed submission package (including profit sensitivity analysis)
• Submit to appropriate lenders to secure competitive terms (and negotiate profit split if possible)

Step 4: Offer & Legal Process

Once an offer is received:

• Review terms (profit split, interest rate, drawdown structure, exit requirements, step-in rights)
• Instruct solicitors to handle legal agreements (loan agreement, profit-share agreement, security documentation)
• Arrange valuation and monitoring surveyor (required by lender)

Step 5: Drawdown & Project Delivery

• Funds released in stages as build progresses (typically aligned with RIBA stages or agreed milestones)
• Monitoring surveyor inspects and certifies each stage before release
• Interest rolls up (no monthly payments) until project completion

Step 6: Exit & Profit Distribution

• Sell completed units or refinance onto long-term mortgages
• Repay lender’s capital + rolled interest from sale proceeds
• Distribute remaining profit per agreed split (typically 50/50)

Get Expert Joint Venture Finance Advice

If you’re an experienced developer with a strong project but lack the deposit for traditional development finance, joint venture finance could be the solution that allows your project to proceed with zero capital at risk.

I offer:

• Free initial consultation to assess your project and profit margins
• Access to specialist joint venture lenders
• Transparent advice with honest assessment of whether JV finance is more profitable than traditional finance
• Coordination with solicitors, valuers, and monitoring surveyors

Serving property developers across Scotland, England, and Wales

Capital 8 Finance – 100% development funding for experienced developers with strong projects.