A bridging loan is a short term finance option typically used by developers for the life of a project, before refinancing on to a longer term option upon completion.
Development finance tends to be necessary at two stages of a project; funding the initial purchase of a site, and financing the build. Generally, a lender will be happy to advance around 75% of the total cost of the build. Due to the nature of building work and the need to make payments at various points of development, you may also find yourself requiring assistance with cash flow.
This is where a short term financing solution can be the most appropriate option.
What do you need to know about bridging finance and development?
Developments move quickly and things can change in an instant, which is where bridging finance can be most valuable. Bridging loans can come with higher interest rates than your standard mortgage, but they provide a quick solution for those who are restricted timewise.
Typically, developers will require a bridging loan to complete the development of an asset. They are also used to fund onward projects whilst waiting for an existing one to complete.
There are a number of other reasons as to why a development bridge may be needed, ranging from cash flow issues to borrowing for the refurbishment of a buy to let property.
In any case, our expert bridging brokers can advise on the best course of action.
How can Enness help with bridging finance for development?
Enness’ bridging and development finance brokers are experts within the development sector and are not limited to just working in the UK. Much of our development bridging work is international in nature and our unusually large network of industry contacts and partners allows us to expertly facilitate our clients’ development bridging needs, whatever they may be.