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Bridging loans For Property Development

Whether your project is build-to-let (commercial or residential) or a self-build development involving construction or refurbishment – a suitable bridging loan can meet any individual or company’s needs.

A short-term loan (varying from 1-36 months) can often be the best solution in raising capital for your property development project. 

How is a property development bridging loan helpful?

Getting a foothold in the property development market can be challenging without thorough planning and financing. Thankfully, bridging loans bridge the gap when traditional finance does not pair well with the competitive, fast-paced environment of securing properties to develop. 

Typically, a bridging loan is helpful when awaiting the pending sale of a built-up property to finance additional development projects.

A bridging loan will give the flexibility needed to acquire new properties, finance redevelopment, renovate, or refurbish existing properties. 

Whether you are a seasoned property developer, a company investing in residential and commercial property, or even a novice – a bridging loan can help smooth and expedite the process, where traditional finance cannot. 

What are the advantages of a property development bridging loan?

Here is an overview of some of the advantages of using a bridging loan for your prospective development projects;

  • Unmortgageable properties - the primary use for a bridging loan in property development will likely be financing unmortgageable properties. This is perhaps the most beneficial aspect of a bridging loan when developing property for whatever purposes.
  • Development sites – attempting to buy land for property development purposes comes with competition. A bridging loan would secure capital, enabling a property developer to get ahead of competing parties with the necessary funds.
  • Build-to-let projects – it is an expensive endeavour to buy up properties to develop into residential homes. However, when considering the eventual profitability, it would be essential to secure the funds necessary to cover building costs where traditional mortgages cannot be applied. A bridging loan will allow for development to begin at a faster pace.
  • Self-build projects – projected costs for construction and building a self-build project can run high. Usually, these costs cannot be met as the prospective build is unmortgageable. With a bridging loan, the project can get underway without delay.
  • Redeveloping auction properties – properties bought at auction must be paid within the short time frame (28 days). A bridging loan will raise the capital needed for payment on time, allowing the property development to get underway as early as possible.

What are the requirements for a property development bridging loan?

Property development projects can be a risky endeavour, not only for borrowers but risky for lenders as well. Consequently, a more stringent examination of your track record may follow any application for a bridging loan of this nature. 

Credit history will be taken into account more closely, along with your previous experience and success in property development.

Additionally, the valuation of a development site or prospective properties will be considered when applying for a bridging loan.

A clear repayment plan is needed…

Property developers must bear in mind the inherent risks that come with bridging finance, 

Awareness of delays and unexpected costs ensures there are no oversights - it is essential to the success of a project. 

A solid repayment plan is necessary to see that a project doesn’t exceed the loan term period and avoid interest payments – which can be more costly.

How to secure a bridging loan for property development

Seeking advice and expertise is essential to the success of a project. We have strong relationships with lenders that offer bridging finance to suit this scenario.

We identify and secure the best solution for you, having access to the short-term finance market.

Bridge loans for property development

Bridging loans offer an alternative to traditional finance and are helpful in adequately financing a lengthy, ongoing development project.

  • Upsizing
  • Downsizing
  • New Build
  • Investment
  • Refinancing
  • Renovation
  • Commercial
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