Everything you need to know about Bridging Loans for Property Development
The world of property development is incredibly fickle and fast paced. Whether you want to fix and flip with a small scale property conversion or undertake a large development operation, a property development bridging loan can provide the necessary funds to assist with the process.
If time is of the essence, a property development bridge loan offers a quick and immediate form of capital to help you get your conversion, refurbishment, renovation or extension projects in motion, before re-mortgaging or selling at a higher market rate.
And, the faster you can go, the less it’s going to cost you. At Bridging Options, we can source finance for residential, commercial and mixed-use developments within a matter of days. So, if you need capital to purchase a house or add value through refurbishment and renovation work, then give us a call today, to discuss taking the benefits of property development bridge loans.
Property development loans explained
A bridging loan for property development offers a unique solution for those looking to expand on new opportunities or ventures.
Because when you find the perfect property to add to your portfolio, you don’t want to be sitting around trying to find the means to purchase it. With such a small window of opportunity to complete the sale, property bridging loans provide a way of getting access to capital quickly.
Not only does a property development loan offer you a chance to get funding for a project when you need it the most, but it can enable you to purchase properties when most standard finance plans or mortgages won’t.
For example, if the property is currently uninhabitable or you intend to sell as soon as the work is complete, then most forms of long-term funding will not be eligible to you. Bridging loans, however, can be turned around quickly and can bridge the gap until longer term finance can be secured.
The benefits of bridge loans for property development
There are many benefits to taking out a property development bridge loan including:
- The speed at which funding can be secured.
- A short term agreement, meaning you are not tied down for years to come.
- The potential to purchase high risk properties.
- The flexibility to cover both the purchasing of a property and/or the refurbishment
Here we explain more…
The biggest benefit for any property development is the speed in which funds can be accessed. Bridging finance is much more flexible than other forms of borrowing and in general requires fewer pieces of information and a less stringent set of criteria.
At Bridging Options, our property development loans can be used to purchase a variety of assets including houses, flats, apartments and even commercial units. This means that regardless of whether you want to invest in a block of apartments, buy to let or HMO, then our property development bridging loans are open to all.
It is often the greatest risks that reap the biggest rewards. This is why uninhabitable properties – such as those without electricity or plumbing – are so appealing to developers. But although the potential may be plain to see, these types of properties are considered high risk and securing traditional forms of funding is often impossible. A bridging loan however allows you to cover the cost of repairs and renovations until the property has reached an acceptable liveable standard.
Rates and borrowing terms
A property development loan is usually arranged on an interest only basis, with the length of borrowing typically ranging between 6-18 months.
At Bridging Options, we discuss repayment terms upfront and in full before a loan is agreed, and although interest is generally rolled up as part of the loan, repayment terms are often amended to suit each individual project.
We have no set rates for property development finance, only the rate that works best for you. Working with a panel of brokers, we can assess your situation and give you an honest and open appraisal on whether bridging finance will work for your property project.
If you decide to proceed, we will assist in getting the right match and can negotiate the best rates for you. With years of experience in helping property developers secure bridging loans, we can guide through each process and help strengthen your submission.
Next steps for securing a property development loan
As with any loan agreement, bridging finance is not something to be taken lightly. Therefore, it is of the utmost importance that you consider and fully understand the implications, rates, repayment terms, and suitability. Our lenders will happily listen, advise and talk you through any concerns that you may have.
And, if you think it is something that you would like to progress with, we can get the ball rolling to find the best bridging finance for you.
At Bridging Options, our property development bridge loans are assessed on an individual basis, so when the time comes, we will require you to supply us with detailed information. We will need to take into consideration:
- The value of the site or property in its current state – i.e. before building works or refurbishment;
- the build and conversions costs associated with the project; and
- the expected value of the property once completed.
As our development finance packages are bespoke to fit your requirements, we will also take into account:
- Your previous experience and track record of property development.
- The type of scheme being undertaken.
- The amount of funding required.
- The time it will take to complete the project.
- The location of the development, details of building regulations and restrictions and proof of planning permissions.
How Bridging Options can help you
For specialist advice from a bridging loan expert who understands the property development market, please get in touch with one of our brokers today.
Bridging finance could be the difference between you missing out on a property purchase, renovation project or commercial development. So, to make the most profit from your investment portfolio call Bridging Options today.
And remember, opportunity knocks just once, so it is always best to be prepared.