How to Finance Land Acquisition Before Planning Permission in Portugal
You have identified a site — maybe even one under offer — but the licence is months away and the bank wants milestones you cannot reach without owning the land. Here are the realistic ways to fund the purchase, what lenders look at, and what to prepare.
By the Verde Capital credit team · Publication date: 14 October 2026 · Scheduled review: 14 April 2027
The direct answer
Land can be financed before planning permission in Portugal, but not by conventional construction lenders. The realistic routes are: developer equity, a senior-secured land loan from a private development finance lender, or a bridge loan against the site (or other property) while licensing progresses.
What makes it possible is the asset itself: a first-ranking mortgage over land whose value is established by an independent valuation. What makes it expensive relative to bank debt is the risk the lender carries — the licence does not exist yet, and the land's realised value depends on the project that depends on the licence.
What lenders actually look at
For an acquisition-stage facility, underwriting converges on four things: the land's value today (independent valuation), the purchase structure (price, taxes, stamp duty), the borrower's experience and equity, and the credibility of the path to planning — the municipal master plan (PDM), pre-application feedback, and a design team that has worked the municipality before.
The loan-to-value will be conservative: the lender is pricing a site that cannot yet be built on with certainty. Expect the facility to cover part of the purchase, with the developer funding the remainder plus costs from equity.
What to prepare before you apply
- Land registry certificate and title documents.
- Purchase agreement or promissory contract (CPCV) terms.
- Licensing posture: pre-application minutes, PDM notes, feasibility letters.
- Project concept: unit count, areas, initial plans.
- Budget: price, taxes and duties, professional fees, carry.
- Company details and track record of past projects.
The risks to weigh
Licensing risk is the big one: a refusal or a long delay changes the project's arithmetic. Cost of carry, market movement between purchase and exit, and the concentration of capital in an illiquid asset are the others. Land finance buys time and certainty — it does not remove the planning risk, and nothing here is financial advice.
How the funding is repaid
The exit is the next capital event: refinancing into a licensing or pre-construction facility once the project advances, a construction-stage bank loan once licensing and pre-sales exist, or resale of the site with its improved prospects.
How Verde Capital fits in
Verde Capital provides short-term, senior-secured development finance of €1–5m to experienced residential developers in Portugal — covering land acquisition, licensing and the bridge to pre-sales and conventional bank financing.
If you are preparing a project, describe it through our online application and you will receive indicative terms within 24 hours. All lending is subject to underwriting, security and full due diligence; nothing here is an offer of credit or investment advice.
Sources
This article is an educational resource from Verde Capital and is not financial, legal or tax advice. All lending is subject to underwriting, security and full due diligence.
Miguel is happy to walk you through it
As one of the investment analysts at Verde Capital, I read every enquiry personally. If you are weighing up land, licensing or pre-construction costs — or you have been turned down elsewhere — tell me about the project and I will give you a straight answer on what we can do.
No slides, no pressure. A short call, your numbers on the table, and an honest view on whether Verde is the right fit. If we are, you will have indicative terms within days.
Miguel
Investment Analyst
