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FINANCE

Bridging Finance for Property Development

Bridging Finance for Property Development 45

One of the biggest benefits of bridging finance is the flexibility of the facility that is available to the borrower. A bridging loan sourced from a top-rated UK lender can be used for any legal purpose whatsoever and can often be accessed within a matter of days.

This makes it a particularly useful product for property developers and investors. Throughout all stages of a property development project, a bridging finance can provide the flexible and cost-effective funding needed to ensure its success.

Bridging Loans for Acquisition

A fast-access bridging loan can be the single best option for quickly and affordably acquiring a site for development. Particularly when sites go under the hammer at auction for less than their true market value, beating competing bidders to the punch means acting fast.

Bridging finance provides property developers and investors with access to the money they need to cover any such purchases within a few working days. Often this is the only realistic way of funding property purchases at auction, where the full payment is required shortly after the event.

The loan can then be repaid at a later date in full, with any interest accrued and additional borrowing costs significantly lower than those of a conventional loan or commercial mortgage.

Bridging Loans for General Project Costs

A bridging loan can also be a useful facility for covering many general costs for the duration of a property development project. It can provide access to affordable capital while obtaining planning permission, finalising contracts and getting the project underway.

Another advantage is how property development finance can help developers and investors cover essential procurement costs when sourcing essential materials and resources for the project, with the loan being repaid several months later with typically much lower borrowing costs than most comparable facilities that are available.

Should adjustments to the project plan be necessary at any stage, the funds raised by way of bridging finance can help developers ‘bridge’ these temporary financial gaps.

Bridging Loans for Property Completions and Exits

Upon completion of a project, there will often be a period of time before the site is sold. The events of the past 24 months illustrate this with painful clarity, as hundreds of completed or near-completed projects stood unsold for considerable time when lockdown was enforced in March 2020.

Bridging finance provides property developers with a flexible and cost-effective way to cope with these delays, bridging the gaps between site completion and sale. Where the sale of the site is likely to be completed within a few months, a low-interest bridging loan facility can provide much-needed peace of mind in the interim.

Just as is the case when bridging loans are used for chain break purposes – which is the most popular use for bridging loans among private borrowers in the UK.

For more information on the potential benefits of bridging finance for property development or to discuss your development finance requirements in more detail, call anytime for an obligation-free consultation.

Bridging Finance for Property Development 46About the Author:

Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO agency and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as FT.com, djkit.com, UK Property Finance, Serimax and also supported UK doctors, solicitors and property developers, gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships

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