How does development financing work?

The primary difference between development financing and a bridging loan is that a bridging loan is drawn down in a single transaction and as such the borrower pays the full interest on the whole sum from that moment until the loan is repaid, whereas development finance is not.

Development finance is drawn down in tranches, or stages, ensuring that the developer is only ever drawing the funds as they require them for cash flowing the construction. This ensures that only the absolute minimum is borrowed at any one time and as such that also means the amount of interest owed on the loan is kept to its absolute minimum, ensuring maximum development profitability.