Top 15 funding myths that slow developers down

There are a lot of assumptions about property development. Some of them right, some of them myths. Of those that fit into the ‘wrong’ category, there are some that aren’t just wrong, they can actively slow down your plans.

This kind of hearsay has a surprisingly strong hold. Some of it might’ve been true in the past but is no longer relevant, whilst some of it might never have been true.

At VM Finance, we talk to developers every day, working together with them to achieve their development goals through our relationship-led approach to funding. With all that hands on experience, we’re in a good position to dispel the myths surrounding property development. In this short blog, we’ll look at 15 of the biggest myths, breaking them down and removing them as a limitation on your development journey.

1. You need 40% equity to get started

That might be true for some lenders, but not for us. On bridging deals, we can potentially fund up to 75% of the value. If we can make the numbers work, the exit strategy makes sense, and the rest of deal makes sound financial sense, you don’t always need to commit huge equity just to get going.

In many cases, we can structure the deal around what you’ve got.

2. Banks are safer and cheaper

Ok so, there’s some truth to this one, but banks are also slower, stricter and far more cautious when it comes to anything outside the ordinary. That cheap rate means very little if it takes six months to draw down or if they change their mind halfway through. Speed, flexibility and quality matter just as much and that’s where VM Finance shine.

3. Lenders won’t touch permitted development

Permitted development schemes can actually be a smart bet for the right lender. They often carry less planning risk and allow for quicker delivery. At VM, we have a solid history working with them. What we care about is whether the scheme is viable, the team is capable and the numbers make sense.

That’s what matters.

4. You need full designs before speaking to a lender

You don’t need a glossy design pack and a 300-page viability report to get a lender’s attention. A clear outline of the opportunity, some numbers and your approach is enough to start a conversation. We regularly fund pre-planning deals, bridging for planning or early-stage acquisitions. Talk to us sooner rather than later. It usually saves time in the long run.

5. You only get one shot at funding

Development is messy. Costs move, partners change, timelines slip. That doesn’t mean the deal’s dead. We work with developers to reshape deals where we can. Funding is a live conversation that evolves with your project. It doesn’t have to be one shot then done.

6. You can’t get funding without planning permission

We fund plenty of deals before planning’s in place, particularly where there’s an existing use value, positive pre-app, uplift strategy or a compelling case for consent. A well-considered plan and local knowledge can go a long way. If the site and team give us confidence, we’re open to it.

7. You need a perfect credit history

It helps, of course. But we’ve backed developers with a few bumps in the road. What we care about is the viability of the project, the people behind it and the plan for getting in and out cleanly. A single missed payment two years ago isn’t the end of the world.

8. If your build costs change, the lender pulls out

Materials go up. Labour costs shift. Delays happen. We know that. The key is communication. If the build costs change but the deal still works overall, we’ll help find a way to restructure or adapt. We’re not here to panic at the first sign of movement.

9. Only experienced developers get funding

We’ve worked with first-time developers and seasoned pros alike. Experience helps, but it’s not everything. If you’ve done your research, have the right professionals on board and a plan that stands up to scrutiny, we’re open to a conversation. Everyone has to start somewhere.

10. The cheapest lender is the best lender

That lower rate might look attractive, but it’s not worth much if you can’t draw down when you need it or end up stuck in red tape. The true cost of finance isn’t just about interest. It’s about reliability, speed and flexibility. Cheap can be expensive if the deal falls through.

11. Funders won’t touch listed buildings

Some won’t. We do. We’ve already funded several Grade II listed projects and we know how to structure deals that factor in the extra risks and quirks. If the numbers work and the team knows what they’re doing, we’re not put off by a bit of heritage.

12. Lenders only do residential

That might be true for some, but not us. We fund a mix, from resi and commercial to hybrid schemes and storage solutions. If it’s a solid asset with a viable plan, we’re happy to look at it. We don’t have a one-size-fits-all policy. Just recently, we funded an open storage scheme, demonstrating the diverse projects we often fund.

13. Bridge finance is only for desperate situations

Not at all. Bridging is often the most effective way to unlock opportunity, particularly when time is tight or planning is still pending. We use it strategically to help clients secure sites, move quickly or create value before switching to longer-term funding.

14. The person who agrees your deal disappears once it’s signed

With VM Finance, the same people who structure your deal stay involved through drawdown and beyond. You won’t get bounced between departments or stuck in a support inbox. We believe continuity makes for better outcomes, especially when things change.

15. Lenders don’t introduce you to anyone useful

We take a relationship-led approach, always. If we know someone who can help you solve a problem, plug a gap or accelerate progress, we’ll make the introduction. Whether it’s another developer, a planning consultant or a professional team, we’re not precious. We’re here to help deals happen.

Let’s talk earlier, not later

We’re a flexible lender that focuses on a relationship-led approach to development, helping you build a legacy that results in financial wellbeing for all involved. To do that, it requires us to look at the whole picture, not just a tickbox list. So if you’re sitting on a deal and holding off because of something someone once said at a networking event, maybe now’s the time to sense-check it.

We might just be able to make it happen.

Contact us today to start the conversation.

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