Development Finance in Spain: Fund Your Property Project from Land to Completion
Alternative finance for property developers, investors, and private individuals building or renovating in Spain — structured and presented to specialist lenders by our team on the ground.
What is development finance?
Development finance is medium to long-term funding structured around the specific phases of a property project — from land acquisition through construction, renovation, and completion.
Unlike a standard mortgage, development finance is designed to move alongside a project. Funds are typically released in stages aligned with construction milestones, rather than as a single lump sum. This makes it a more efficient use of capital and reduces the total interest burden during the build.
Development finance is a form of alternative lending, arranged outside the traditional Spanish banking system. It is assessed on the viability of the project, the credibility of the exit strategy, and the experience of the team behind it — not solely on income documentation or standard credit criteria.
In Spain, it is used by professional developers, international investors, and private individuals who are building, renovating, or completing a property project and need funding that Spanish banks are unable or unwilling to provide.
Who development finance is for
Development finance is used by a wide range of clients, from experienced developers managing large-scale projects to private individuals undertaking significant renovations.
It is commonly used by:
- Property developers financing new builds, ground-up construction, or multi-unit projects
- International investors acquiring land for development in Mallorca, Marbella, or Ibiza
- Private buyers funding major renovation or restoration projects
- Developers completing partially built or stalled projects
- Investors restructuring existing development debt
- Self-build clients financing a bespoke residential project in Spain
Both professional developers and private individuals can access development finance. The key requirement is a viable project with a clear exit strategy — typically a sale, refinance to a standard mortgage, or rental income once complete.
Phases we can finance
Each phase of a development project has different funding requirements, risk profiles, and lender criteria. We structure finance that matches the real needs of your project at each stage.
1
Land acquisition
Securing the right plot at the right time is often the most time-sensitive part of a development. We arrange finance to fund land purchases in Spain, including sites with planning or those where planning is being sought.
2
New construction
Ground-up development finance for new residential or mixed-use construction in Spain. Funds released in stages aligned with build milestones to optimise cash flow and reduce interest exposure.
3
Renovation and rehabilitation
Finance for significant renovation projects, including properties requiring full refurbishment, structural work, or conversion. Traditional lenders will not mortgage a property in poor condition — development finance fills that gap.
4
Advanced phases and project completion
Finance to complete an existing development where funding has run short, a lender has withdrawn, or the project has stalled. We assess the remaining works and structure funding around what is needed to reach a saleable or refinanceable position.
Why Spanish banks often can't finance development projects
For international developers and investors, Spain’s traditional banking system creates significant obstacles.
Spanish banks require extensive documentation, are slow to make decisions, and typically will not lend on land without full planning permission, properties in poor condition, or projects with complex ownership or income structures. They are not built for the speed or flexibility that development projects demand.
Development finance sits outside the traditional banking system. Lenders assess projects on their own merits — the viability of the scheme, the quality of the exit strategy, and the track record of the team — rather than applying the rigid criteria of a retail bank.
For projects that do not fit a standard bank profile, or where timing is critical, alternative development finance is often the only route to getting a project moving.
Key details at a glance
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Loan range | €500,000 to €50 million |
Loan to value | Assessed on a case by case basis |
Security | Spanish real estate and development assets |
Lender types | Private banks, hedge funds, family offices, specialist finance providers |
Phases covered | Land, new build, renovation, advanced phases, completion |
Fee model | Success-only — no fee if finance is not secured |
Locations | Mallorca, Marbella, Ibiza, and across Spain |
The success-only fee model means our interests are aligned with yours. We only get paid when your project gets funded.
Development finance in practice
A developer acquires a plot in Mallorca for €1.2 million and needs €2.8 million to fund construction of four villas. A Spanish bank declines — the project involves land and unbuilt units with no track record in Spain. Development finance is arranged against the project value, with funds released in phases as each construction milestone is reached. On completion, the villas are sold and the finance repaid from proceeds.
Figures are illustrative. Individual projects are assessed on their own merits.
How the process works
Development finance requires more detailed structuring than bridging finance. The quality of the financing dossier — how the project is presented to lenders — directly affects the terms you receive and the likelihood of approval.
Initial assessment
We review the project, the site, the development plan, and the proposed exit strategy. We give you an honest view of what is fundable and at what level before any work begins.
Structuring the transaction
Working with our specialist finance partner, we structure the financing in a way that matches the real needs of each phase. We prepare a rigorous financing dossier in the format that specialist lenders require.
Lender selection and presentation
We present your project to lenders from a network of private banks, hedge funds, family offices, and specialist finance providers whose criteria match your transaction. Different lenders suit different project types — we select carefully rather than approaching the market speculatively.
Negotiation and completion
We manage term negotiation, documentation, and the process through to formal commitment. You receive clear, English-language guidance at every stage.
Ongoing management
For phased projects, we manage the relationship with the lender through each drawdown milestone, ensuring funds are released on time to keep your project moving.
Try our mortgage calculator and see how much your repayments will be.
Where we work
We arrange development finance across Spain, with particular focus on the markets where international development activity is strongest.
Mallorca
the Balearics' primary market for high-value residential development. Villa projects, renovation of traditional fincas, and new build developments across the island.
Marbella and the Costa del Sol
one of the most active markets for luxury residential development in Europe. Strong demand from international buyers makes exit strategies straightforward for well-located projects.
Ibiza
a premium market with high per-unit values. Development finance for villa projects, renovation, and boutique development schemes.
We also work on development projects across Barcelona, Madrid, Valencia, and other Spanish markets where the scheme warrants it.
Contact us and let's talk mortgages!
Have questions? Fill out the inquiry form and we will get back to you within 24 hours.
Get in touch with our team of experts today!
- +34 871 51 00 55
- hola@baleario.com
- La Rambla, 13, 07003 Palma, Illes Balears
Development finance vs bridging loans
Both are forms of alternative lending, but they serve different purposes. Choosing the right structure from the outset matters.
| Development finance | Bridging loan |
Primary purpose | Full project financing across phases | Immediate short-term liquidity |
Loan range | €500,000 to €50 million | From €100,000 to €10 million |
Timeline | Medium to long-term, phased drawdowns | Short-term, single drawdown |
Fund release | In stages against construction milestones | Usually in full at outset |
Best suited for | New builds, renovation projects, completions | Acquisitions, chain breaks, equity release |
Assessment basis | Project viability, exit strategy, team track record | Asset value and exit strategy |
In some cases, a bridging loan is the right first step — for example, to secure a site quickly — with development finance arranged once planning and project details are confirmed. We assess which structure, or which combination, fits your situation.
How Baleario and our finance partner work together
Arranging development finance is one part of a property project in Spain. For international developers and investors, the tax and compliance side is equally important — and frequently where costly mistakes are made.
At Baleario, we handle the tax planning, structuring, and compliance work that surrounds a Spanish development project. This includes how the project should be held for tax efficiency, VAT treatment on new builds, capital gains planning on sale, wealth tax implications during the hold period, and whether a corporate structure makes sense for the project.
Our specialist finance partner handles the development finance itself — assessing the project, structuring the transaction, preparing the financing dossier, selecting lenders, and managing the process through to completion and beyond.
For international developers working in Spain, that combination — finance structuring and tax advisory working from the same starting point — is where real value is created. Most problems we see arise because the finance and the tax were planned separately, often with neither party aware of what the other had committed to.
Tell us about your project
Development finance in Spain requires careful structuring from the start. The earlier we are involved, the more options we can create for you.
Send us an outline of your project — the site, the scheme, and where you are in the process — and we will come back to you within 24 hours.
FAQs: Development finance in Spain
Can non-residents and foreign nationals access development finance in Spain?
Yes. Development finance in Spain is available to non-residents and foreign nationals. Assessment is based on the project and exit strategy rather than residency status, making it accessible in cases where Spanish bank lending is not available.
What size projects can be financed?
We work with development finance from €500,000 up to €50 million. Projects below this range may be better suited to bridging finance or other structures, which we can also advise on.
Does the land need planning permission before finance can be arranged?
Not necessarily. Some lenders will finance land without full planning permission, particularly where a credible planning case exists. However, the terms and loan-to-value available will typically be more conservative until planning is confirmed. Each case is assessed individually.
Can I get development finance for a renovation project, not just new builds?
Yes. Development finance is used for significant renovation and rehabilitation projects as well as ground-up construction. If a property requires substantial work that prevents it from being mortgaged conventionally, development finance is often the appropriate structure.
How is loan-to-value calculated for development finance in Spain?
LTV for development finance is typically assessed on a loan-to-cost basis (the total cost of the project) or loan-to-gross-development-value (the projected completed value). The right approach depends on the project type and lender. We assess this as part of the initial structuring.
How are funds released during a development project?
Funds are typically released in tranches aligned with construction milestones — completion of foundations, structural frame, external works, and so on. This staged approach reduces lender risk and also means you are only paying interest on funds drawn, rather than the full loan from day one.
What is the exit strategy for development finance?
The most common exit strategies are sale of the completed units, refinance to a standard mortgage or investment loan once the property is complete and tenanted, or in some cases a combination of both. A credible and realistic exit strategy is one of the most important factors in securing development finance.
How long does it take to arrange development finance in Spain?
Longer than bridging finance, because the project assessment and dossier preparation require more detail. Timelines depend on project complexity and how prepared the documentation is at the outset. We give a realistic assessment of timing at the initial stage.
Do I need a Spanish company structure to access development finance?
Not necessarily, though in some cases a Spanish SL (Sociedad Limitada) is advisable for tax efficiency or lender preference. We assess the ownership structure as part of the wider tax and finance planning, not in isolation.
What happens if my project runs over budget or behind schedule?
This needs to be planned for before finance is arranged. We build contingency into the project assessment and discuss how cost overruns or timeline extensions would be managed. Lenders will want to understand this scenario upfront rather than encounter it mid-project.
Can Baleario help with the tax side of a development project in Spain?
Yes. We handle the tax planning, structuring, and compliance work alongside the finance — including VAT treatment on new builds, capital gains planning, corporate structure advice, and wealth tax implications. This is where our role as introducer and tax adviser adds significant value for international developers.
Is development finance available across all of Spain?
Yes, though our primary focus is Mallorca, Marbella, and Ibiza, where international development activity is strongest. We also work on projects across Barcelona, Madrid, Valencia, and other markets.
Related articles
- Development finance in Mallorca — funding your villa project
- Development finance in Marbella — what luxury developers need to know
- New build vs renovation in Spain — which is easier to finance?
- How VAT works on new build property in Spain
- Should you use a Spanish SL company for your development project?
- Development finance vs bridging loans — choosing the right structure
- Capital gains tax on property development in Spain — what to plan for
Last reviewed: May 2026
This page is for informational purposes only and does not constitute financial advice. Lending is subject to assessment, lender criteria, and individual circumstances. Always seek independent financial and legal advice before entering into a finance agreement.