Quick answer: Yes — but it depends

Staged drawdowns are a commonly used funding approach for refurbishment, fit‑out and light development work. They reduce risk for lenders by tying each release of funds to verified completion of a defined milestone. The partners and lenders UK Business Loans can introduce include development/refurbishment finance specialists, some bridging lenders, specialist commercial mortgage providers and brokers who arrange fit‑out or contractor‑backed finance — many of whom will structure staged payments. However, whether you receive milestone releases (and the precise schedule) depends on the product, the property’s security, contractor quality and the strength of your paperwork.

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When staged drawdowns are typically offered

Staged drawdowns are most common in loans designed to fund works where value increases as construction completes. Typical scenarios include:

• Development & refurbishment finance — (commercial property) lenders commonly use staged releases as the most straightforward risk control.
• Fit‑out finance — retail, hospitality and office fit‑outs often use milestone payments to pay contractors as works complete.
• Bridging loans with a refurbishment element — short‑term lenders will often allow staged releases where the borrower needs cash for works before refinancing or sale.
• Commercial mortgage top‑ups for refurbishment — some commercial mortgage lenders will include staged funding where the works are part of a refinance or purchase.
• Supplier/contractor‑backed asset finance — certain schemes pay contractors directly at agreed stages.

Conversely, standard unsecured business loans or plain term commercial mortgages are less likely to offer formal staged drawdowns unless packaged by a specialist broker.

How staged drawdowns work — the mechanics

Staged drawdowns follow a repeatable pattern. Understanding the steps helps you prepare and speeds approvals:

1. Pre‑approval & project appraisal — the lender reviews a cost plan, builder quotes and a valuation of the property “as‑is” and “after works”. Lenders often ask for an independent quantity surveyor (QS) or architect’s scheme.
2. Drawdown schedule — you and the lender agree milestone stages (for example: legal completion / on‑site start, roof on/first fix, 50% completion, practical completion, snagging). The schedule sets amounts or percentages tied to each stage.
3. Evidence at each stage — common evidence includes contractor invoices, signed certificates of practical completion, site photos and an interim QS valuation confirming the completed work and residual security value.
4. Release of funds — lenders may pay funds directly to the contractor or release to the borrower’s account depending on trust, contracts and anti‑fraud checks. Some retain a final percentage (retention) to cover defects.
5. Inspections & valuations — independent or appointed surveyors inspect progress and report before each release; scheduling these efficiently reduces delays.

Typical example split (illustrative only): initial 15–30% on start, 40–60% across interim stages, final 5–10% retained for snagging. Exact percentages vary by lender and project risk — be wary of lenders who promise fixed splits without site appraisal.

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Documents & information lenders will ask for

Preparing the following documents before you enquire will reduce delays and improve matching to lenders who accept staged draws:

• Detailed cost plan and schedule of works (preferably QS‑prepared)
• Signed contractor contract(s) — fixed‑price contracts help
• Project programme showing milestones and durations
• Planning and building control approvals, party wall agreements (if applicable)
• Existing property valuation/title deeds and any existing charges
• Company accounts, management accounts and cashflow forecasts
• Evidence pack for each drawdown: contractor invoices, completion certificates, site photos, interim QS report

Tip: a professionally produced QS report and fixed‑price contractor contract often swing lender decisions in your favour.

Typical lender requirements & criteria

Lenders use various controls when approving staged releases:

• Security: most require a first charge on the property; some ask for additional security or personal guarantees for smaller companies.
• Contractor experience: lenders prefer established, insured contractors on fixed‑price terms.
• Independent verification: independent QS sign‑offs and interim valuations are often mandatory.
• Contingency & VAT treatment: lenders expect contingency sums in cost plans and clarity how VAT will be funded.
• Borrower track record: businesses with demonstrable trading history or prior similar projects secure better terms.

Working with a broker experienced in refurbishment drawdowns is often the fastest route to an appropriately structured facility.

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Pros & cons of staged drawdowns for refurbishment

Real‑life examples

How UK Business Loans helps

UK Business Loans is an introducer that matches businesses planning refurbishments with lenders and brokers experienced in staged drawdowns — we don’t lend ourselves or provide regulated financial advice. Complete a short enquiry and we’ll match your project to partners who specialise in refurbishment and fit‑out finance for facilities from around £10,000 upwards.

1. Complete our short form — it takes under 2 minutes.
2. We match you to lenders/brokers with the right appetite for your project.
3. Receive a free, no‑obligation eligibility check and quote from a matched partner.

Get Quote Now — Free Eligibility Check (submitting an enquiry won’t affect your credit score).

Practical checklist to speed approval

1. Agree a fixed‑price contract with your contractor where possible.
2. Obtain a detailed cost plan and independent QS report.
3. Define clear, measurable milestones and include them in the contract.
4. Secure planning and building control approvals before applying where required.
5. Prepare company accounts and a short cashflow forecast showing funding gaps.
6. Decide whether lender will pay contractor directly or release funds to your account.

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Frequently asked questions

Will staged drawdowns cost more?

Possibly. Expect costs for interim valuations, QS reports and inspections. However, interest is generally charged only on amounts drawn (depending on product), which can offset some of these fees.

Can contractors be paid directly?

Yes. Many lenders will pay contractors directly once invoices and evidence are approved. This reduces fraud risk and reassures lenders the funds are used for works.

What happens if the project runs over budget?

Lenders expect contingency plans. If costs overrun you may need to inject funds, arrange a top‑up with a lender, or re‑negotiate the facility. Disclose realistic contingencies in advance.

How long do inspections and valuations take?

Scheduling and reporting typically takes 3–10 working days but depends on local valuer availability. Plan for slightly longer in busy periods.

Will submitting an enquiry affect my credit score?

No. Submitting a free enquiry via UK Business Loans does not affect your credit file. Partner lenders may run credit checks later if you proceed with a formal application.

Final summary & next steps

Staged drawdowns tied to refurbishment milestones are widely available from specialist partners, but success depends on the loan type, strong contractor contracts, robust QS cost plans and suitable security. UK Business Loans can quickly match your project to lenders and brokers who understand milestone funding and can structure a suitable schedule. To find the right partner and get a free, no‑obligation eligibility check, Get Quote Now — Free Eligibility Check.

UK Business Loans acts as an introducer — we do not lend or provide regulated financial advice. Information on this page is general only and not a substitute for tailored advice from the lender or broker selected.

Further reading & authoritative guidance

• Planning application guidance — GOV.UK
• RICS: property and valuation guidance
• Financial Conduct Authority — consumer information on financial promotions

For a tailored match to lenders and brokers experienced in staged refurbishment funding, complete a quick enquiry — it’s free and won’t affect your credit score.