Bridging Finance & Development Finance: Understanding Your Property Project Options
Short Term Finance
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Making Informed Decisions
Short-Term Funding
Your Property Project Options
Considering a property project but need short-term funding to get it moving? This guide explores bridging finance and development finance, two distinct financing options for property development and investment.
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Bridging The Gap
Bridging Loans
Short-Term Solution
Bridging loans are designed for short-term funding needs, typically lasting from 1 to 18 months.
Unlocking Potential
They can be used for various purposes like:
- Purchasing a property at auction before selling your existing one
- Funding renovations or refurbishment projects
- Bridging a gap in funding for a larger development project
Understanding Your Property Project Options
Key Characteristics
Security
Bridging loans are often secured against the property you’re purchasing or another asset you own.
Interest Rates
Bridging loans typically have higher interest rates compared to traditional mortgages due to their short-term nature.
Exit Strategy
A clear exit strategy for repaying the loan is crucial, such as selling a property or securing long-term development finance.
Building Your Vision
Development Finance
Long-Term Funding
Designed for financing property development projects from start to finish, with terms typically ranging from 12 to 36 months.
Phased Releases
Funds are released in stages based on project milestones, ensuring they’re used for the intended purpose.
Focus On The Project
Lenders assess the project’s viability, including the value of the completed development, to determine loan eligibility.
Understanding The Differences Between Bridging Finance & Development Finance
Understanding The Differences
Bridging Finance
Loan Term
1 - 18 months
Purpose
Short-term needs
Interest Rates
Typically higher
Loan-to-Value
Lower LTV
Security
Often secured
Exit Strategy
Repay with sale or long-term finance
Development Finance
Loan Term
12 - 36 months
Purpose
Full development project
Interest Rates
Can be competitive
Loan-to-Value
Higher LTV possible (based on project value)
Security
Secured against the development
Exit Strategy
Sale of completed development
Helping You Navigate The Right Process For You
Seeking The Right Solution
Free Consultation
Schedule a consultation with a qualified mortgage advisor to discuss your project goals and explore which financing option best suits your needs.
Experienced Team
Our team has expertise in both bridging finance and development finance, helping you navigate the process and secure the most suitable solution.
Helping You Choose The Right Financial Option
Making Informed Decisions
Both bridging finance and development finance can be powerful tools for property projects. Carefully consider your project timeline, funding requirements, and exit strategy before proceeding.
Contact us today! Let’s discuss your property goals and help you choose the right financing option to turn your vision into reality.
The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
