ABSTRACT
This chapter examines the different sources of finance available to developers and illustrate the methods of financing a development. Most developments are funded by a combination of equity and finance. Financial institutions also take on the role of short-term financier by forward-funding development schemes, such as where they provide the necessary interim development finance to a developer and agree to purchase the property on completion of the scheme. The role of the development financier varies depending on factors such as the position of both the business and property development cycle at any particular time in relation to the credit cycle. Equity finance can be raised by issuing various forms of shares in a company, with investors directly participating in the profits and risks of the company. Debt finance instruments became popular as an alternative means of providing long-term finance to hold developments as investments.
