Bridging Loan for Property Development

  • Choose from multiple lenders
  • Deals of lower interest rates
  • Assistance in completing the loan process
  • All types of bridging loans are available
  • Source of instant funds

Enhance property value with bridging loans for property development

Property development is a popular business and a common way for individuals to enhance a property. But, any property-related work demands a substantial amount of money. The reason is that many types of professionals and activities are included in property development. A planning consultant, accountant, surveyor, solicitor, interior designer, builder, manager and contractor work together.

You can understand, it’s a big job. Therefore, sufficient money is also required. A property development bridging loan is the relevant solution to sponsor property development activities. Multiple lenders offer this loan but have different interest rates, repayments and approval policies. During your busy development schedule, you may not understand which lender is best for you. TheBusinessFunds, a loan broker, can do this job for you. We have the best alternatives to help you select a relatable deal on a bridging Loan for business. Let us find suitable lending options. Once you finalise, our team will also assist you in the loan procedure.

What is property development?

Property development is a way to enhance the value of a property. It includes refurbishing or extending an existing property or building a structure on land.

Activities included in property development
  • Make a property more energy efficient
  • Loft conversion of the basement
  • Bathroom or kitchen refurbishment
  • Parking space extension
  • New swimming pool or garden
  • New plumbing and electrics etc…

How does a bridging loan for property development work?

Property bridging loans work like any other bridging loan type. These are used to obtain funds for a short period until a property gets sold or rented out after development or refurbishment. The developers can immediately receive funds through a bridging finance for property development. The process for the application is not complicated, as it is usually a short-term loan. The term ‘bridge’ explains its meaning, i.e. the funds are used to fill a financial gap.

Property developers often face bumpy finances between initiating and completing a project. They sometimes develop a new property, buy it in an auction and sell it off to earn higher profits. On the other hand, they sometimes refurbish or extend an existing property to sell or rent it out. The developers need funds to develop, furbish, or extend a property. Without ample money, such real estate activities cannot take place.

The prime aim of a property development activity is to increase the value of a real estate structure. But if a property gets its final shape and is worthy to be sold further, the developers have to manage the funds. The property bridging finance comes here as a saviour, providing the necessary money for the real estate developers.

What can bridging finance for property development be used for?

Property development includes varied works, and a bridging loan for property development can fulfil all those works and purposes. This loan type can satisfy any short-term financial requirement for property development.

  • Property extension

    A loft, conservatory, or any other kind of extension can increase property value. As a result, developers can sell it at a much higher price. Once the property is sold, the developer can pay off the bridging funds through profit. Developers always try to find properties they can sell profitably by making several small extension alterations. A bridging loan does not let the work stop due to a money crisis.

  • New property development on land

    Developers keep searching for new investment properties. Sometimes, they find a profitable land or plot that will have higher value in the future. As a result, they plan to develop a commercial or residential property to sell at a higher profit in the future. Still, this needs huge funds and waiting for them can delay a project. As a result, the developers obtain a smaller amount of funds for a short time to start the project through bridging loans.

  • Existing property refurbishment

    Selling an old or existing property after refurbishment or renovation is also profitable for developers. But here, attaining the necessary funds may also take time. By that time, the bridging finance property development comes as a saviour. The refurbishment work can start until a bigger loan or investment is approved. The developers start the work and continue it. The small funds have a bigger value and are available when no other help is available.

How to get the best property development bridging loan?

Suppose you want to find the best version of anything that only comes through ample research and comparison. More than that, financial literacy and market knowledge are necessary to acquire. The development bridging finance is for immediate and short-term needs. We understand that when you are in a hurry, it is impossible to research all the lending options thoroughly. But it is also not advisable to randomly pick any bridging loan lender and get stuck in a wrong or expensive deal.

Hiring a bridging loan broker can be a practical decision to make things happen faster. TheBusinessFunds, a business loan broker, can do this work for you. Our team of experts has the necessary insight and experience to find the best lenders for you. They will understand your requirements and shortlist suitable lenders for commercial property bridging loans in the UK. You can take your time and compare their rate of interest.

For any doubt, you can ask as many questions as you want from us or the lender. We proceed with the loan procedure only when you are satisfied with a deal.


Types of bridging loan for commercial property development

According to the requirement and circumstances of the borrower developer, the market offers various types of bridging loans for property development. If you want to apply for the bridging loans for property development, read the following types.

  • Closed bridging loans for property development - The loans with a decided duration are called closed-ended bridging loans. The interest rate of the loans is lowers as the lender has the certainty of repayments.

  • Open bridging loans - Unlike closed-duration property development finance, an open bridging loan does not decide on time duration. The borrower can make the repayment whenever he gets the funds. Due to this uncertainty, the lenders apply a higher rate of interest.

  • First charge bridging loan - For big projects sometimes it is not sufficient to get one bridging loan to buy a commercial property. A borrower sometimes takes loans from varied lenders. A first-charge lender has the first right to get paid fully if the borrower fails to pay for the other loans. It has a lower interest rate.

  • Second charge loan - A second charge bridging loan lender has the second right to get paid by the borrower. If the borrower gets stuck in a money crisis, he will first pay off the complete loan of the first charge lender. Then comes the turn of the second charge lender. These have higher rates and a shorter duration of 12 months.

What is the expected cost of property development bridging finance?

Usually, the bridging finance cost spans from 1% to 2% of your total amount. This is due to the two types of fees the borrower must pay to authenticate the property for the loan. These types are monthly interest rates and valuation or property survey fees. The valuation is vital to ensure the worthiness of your property for loan. The monthly interest rate is applied only if approved for the loan.

Every lender charges differently for it. Due to ignorance, you should not pay an unnecessarily higher amount. TheBusinessFunds finds construction finance options with the lower rate. We always bargain for the best deal for your customers. Our experts know the market's nook and cranny and can easily spot the lender according to your expectations. Let us do all the research and hard work while you take care of your project.

Another important thing about the cost is the bridging loan you take. Closed bridging loan for property development, open bridging loans, first-charge bridging loans, and second-charge bridging loans have different rates. The type you apply for decides the total cost. However, the space to bargain on the rates is always there, and we will do it for you.

Why choose TheBusinessFunds as the bridging loan broker?

We are entitled to fulfil all our commitments to customers. We work with a mix of morals and professionalism while dealing with multiple business loans. Transparency and customer privacy are two pillars of our services. Whatever benefits you can expect from a broker will be offered by us. For better clarity, you can read below to understand why you should choose us as the bridging loan broker in the UK? We are a call or a click away if you still want to know anything.

  • Impartial suggestions on lending options - When you directly reach out to a lender, you will never get unbiased information. After all, every lending company considers its products to be the best. Only a broker can tell you whether a lending option is good for you.

  • Save time and money and labour - Of course, how many lenders can keep applying in the hope of loan approval? Every time, the same procedure and documentation are so tiring. Skip all the stress with us. We will do all the hard work by finding your best options. Choose one while saving your precious time.

  • Lower risk, higher approval ratio - A loan broker always does deep research to find suitable bridging loan lenders in the UK. We do the same after studying your financial circumstances. Our experts immediately find the loan companies where you will have maximum approval chances.

  • Let us bargain for you - It is true that once you choose a lender, the loan procedure starts. It does not mean you cannot bargain on the interest rates and repayments. Let us be familiar with your concerns, and we will bargain with the lender.


How are bridging loans useful for property developers?

For many reasons, a property development bridging loan is useful for developers. Read the reasons below -

  • Acquire funds quickly - The bridging loan procedure is short and uncomplicated. It is an instant source of funds for the property developers until they gather the larger amount for a project.
  • Attainable despite bad credit score - Yes, bridging loans are attainable with a poor credit score. If the repayment capacity of the developer is reliable to the lender, loan approval happens immediately.
  • Grab profitable investment opportunities - With instant availability of funds through bridging loans, a developer does not need to miss investment opportunities. It is why these loans are sometimes called last-minute saviours.
Do I need to make monthly repayments of bridging loans?

No, bridging loans are short-term and need to be paid in one chunk at the end of a term. However, the possibility of flexibility is always there. Sometimes, developers want to make a part payment or early repayment in the middle of the tenure. If the lender has a policy for the same, repayments are possible without any fee. TheBusinessFunds finds lenders who are affordable in all manners.

Are bridging loans for property development safe?

Yes, a bridging loan is always a safe choice if you use it for the purpose for which you borrowed the funds. Also, a repayment strategy, also known as an exit strategy, should be in place. These loans are not new in the lending market, as they have been in use for decades. However, proper market research and finding a suitable lender is always essential. We can shortlist the best bridging loan lenders in the UK for you.

What is the interest rate on a property development bridging loan?

The monthly interest rate of a bridging loan spans from 0.45% to 2%. It depends on its LTV, which is between 55% and 75%, and the lenders' policies. The LTV, as well as the monthly rate of interest, can change. What is more important is your financial situation, repayment capacity, and loan amount. After calculating all the factors, it is possible to give you an exact interest rate applicable to your case.

What is the longest duration for property bridging finance?

Bridging loans for property development usually takes a minimum of 12 months to three years. However, several lenders also offer the duration as long as five years. If you are looking for a bridging loan with a longer duration or even a shorter one, TheBusinessFunds can help you. However, it is essential to understand that any factor in bridging finance depends on your individual financial circumstances. To know your repayment period, apply now.