The property market moves fast and development bridging finance can enable developers to respond quickly to get an edge. There are a number of specialist funding providers whom can provide fast approval for development bridging finance with completion as fast as 7 days.
Examples of Bridging Finance:
- Loans up to 100% of purchase price
- Terms from 3 months +
- Rates from 0.41% PM
- Used for auction purchases, acquiring sites without existing planning consent, HMO acquisitions
Development bridging finance will usually be for a short term period, for example when acquiring a new development site before achieving planning consent. Whilst not all bridging finance providers will accept the land as security before planning is obtained, there are those that will subject to security offered. Such bridging will then subsequently be refinanced with bank development funding to commence the construction. Usually traditional high street banks will not allow a loan to be secured on an uninhabitable piece of land and so specialist advice will be required.
A typical bridging finance facility will range from three to twelve months but extended terms are not unheard of. Naturally, such lending does not tend to come cheap but can provide a quick means to achieve a longer term goal.
The property market moves fast and being able to response quickly to an opportunity with bridging finance can give you an edge.
Development Bridging Finance – Exit strategy
For many special development bridging finance providers, the exit strategy will be key to their confidence in lending. An exit strategy might be to achieve planning consent and refinance with development funding but, in these circumstances, a bank may require professional advice as to the likelihood of getting such consent. A planning consultant can usually offer this type of advice and, indeed, be good for your own piece of mind too.
Criteria for Development Bridging Finance
- Property developers with a track record will be usual
- Some lenders may focus only on residential developments
- The borrowers will need a clear exit strategy
- The lenders will require good security