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Refurbishment bridging loan

  • Fixed interest rate
  • Reach to the best lenders
  • Speedy fund deposit
  • Affordable monthly repayments
  • Assured transparency and privacy

Refurbishment bridging loans for major and minor property repairs

Refurbishment bridging loans fulfill funding requirements for a specific purpose, that is, refurbishment of a property. In other words, you can call it a renovation bridging finance. It can be a commercial or residential property. The loan interest rate starts from 5.5%. However, the property market is volatile. There can always be changes in the minimum and the maximum. Usually, 75% of the property value can be obtained as refurbishment bridging loans.

These are not the only facts you should know about it. There are other aspects as well that you should be aware of. TheBusinessFunds is one of the most responsible commercial refurbishment bridging finance brokers in the UK, helping you find the right lender for your refurbishment requirements. Before that, we prefer to enlighten people about a loan product. It is because we want them to choose the right lending option. Apply right now and let’s talk more about it.

Types of refurbishment

Two kinds of refurbishment activities divide the process into light refurbishment and heavy refurbishment.

Light refurbishment Heavy refurbishment
When refurbishment includes light work like changing fitting and fixtures, flooring, and paint only, it is the light refurbishment. When the refurbishment involves any structural changes or anything that needs planning permission to match building regulations, it is heavy refurbishment.
The usual cost of light refurbishment is under 15% of the total property value, unlike heavy refurbishment. In this type, the cost of construction or reconstruction usually goes higher than 15% of the overall property cost.

What are the varieties of a refurbishment bridging loan?

A refurbishment bridging loan offers the required financial support to transform a property for a better look. Renovation is another word used for the refurbishment. The primary aim of a refurbishment is to make a property more functional. For this purpose, a bridging loan for renovation and improvement projects is a dependable choice. Depending on the use of the property after renovation, there are two varieties of refurbishment bridging loans. One is commercial bridging refurbishment loans, and the other is residential refurbishment bridging loans.

Commercial refurbishment bridging loans

It is during the property used for commercial purposes after refurbishment such as café shop, office etc. Also, when developers refurbish a property to sell or rent it out, it becomes a commercial refurbishment bridging loan.

Residential refurbishment bridging loans

When a property owner needs to sell or rent or make it more functional for his own use.

Mixed-use refurbishment bridging loans

A loan-obtained property that applies for both commercial and residential purposes belongs to this category. Example – A flat above a / restaurant/ shop etc.

The lending criteria can change depending on the type of loan. The calculation of interest rates, repayments, duration etc., can be complicated. Even more complicated can be the selection of redevelopment bridging loans in the UK. This is where you need help of a business loan broker. If you are planning to work on a refurbishment project, TheBusinessFunds can help you get the right loan type with affordable rates. Still, there is a general criterion to qualify for secured or unsecured bridging loans.

What is the lending criterion for renovation bridging finance?

Despite the varied types of bridging loans for property refurbishment, there are general requirements you need to fulfil to apply. Make sure you have the following documents and details. Once you choose the lender from our suggested ones, you will need to forward all relevant information.

Property-related information that is necessary to provide is -

  • You should have a considerable share in the relevant property.
  • A property valuation is another certain thing to happen
  • You should have an exit strategy; it means you should have repay capacity.

Personal and professional information the applicant needs to provide is -

  • Assets and liabilities
  • Planned work on refurbishment project, including the deadlines
  • Experience with proof in property development
  • Property value after the renovation

What is an Exit strategy?

The exit strategy is your plan to pay back the loan completely. The refurbishment lending companies are always keen to know whether you can pay back the obtained funds or not. The property valuation can be an important factor in the exit plan. Those who sell or rent out the property can explain how successfully they can handle the repayments.

How the interest rate on a refurbishment bridging loan is calculated?

Many factors are significant in the interest rate of a refurbishment bridging loan for a business. A bridging loan calculator is usually the primary tool for the lenders. The following factors are taken into consideration to calculate the rate of interest.

The more sincerely you work on the following factors, the better the deal will be on the affordability part.

  • Type of property (commercial/residential/mixed)
  • Loan to value
  • Lending company you choose (lenders differ in their rate policy)
  • Exit strategy of the borrower
  • Urgency of loan

Did you know?

Bridging loans for refurbishment have a fixed interest rate. It means the same rate will be applicable throughout the tenure. Only a slight difference can happen depending on the base rate of the Bank of England.

Refurbishment loan interest rates Vs mortgage rates - Which one is higher?

Considering the fact that a renovation and redevelopment bridging loan is a type of short-term business loan, we can say that the loan has a higher interest rate. On the other hand, the mortgage is for quite a long period. This also means that at the end of the tenure, you will end up paying a much higher amount than what you have borrowed. This also happens due to the interest rate. In the case of a traditional mortgage, the repayments of the first few years have a bigger share of the interest rate. This is why, even after paying the instalments for a long time, you cannot see any considerable reduction in the total loan amount.

Why choose a refurbishment bridging loan broker like us?

Well, there can be several rational factors to prove that choosing a broker is a better option than choosing a lender. TheBusinessFunds is a synonym for a good experience for its customers. We bring the best bridging loan deals for your property refurbishment requirements. Why wait for more? If you are looking for a pragmatically profitable deal, then you should consider the following points.

  • Lenders offer rigid loan deals – of course, a lender cannot compromise its policies for you. It will always be a ‘take it or leave it’ deal for you. While on the other hand, a broker can shortlist multiple refurbishment lenders for you. Now, it is your choice to compare the rates and make a decision to proceed with the loan.
  • Lenders do not assist in loan process - A lender can explain you the product but does not assist in the loan process. However, commercial refurbishment bridging finance brokers in the UK take care of the loan process. You can sit back and relax while they handle the chaos of loan procedure with the lender.
  • Avoid multiple credit checks and applications - Every time you apply to a lender individually, a credit check happens. It leaves a negative impact on your credit score. Besides, you need to keep following the complete application procedure until you do not get approval from a lender. Broker shortlists the best lenders for you.
  • Better bargain on interest rates - A business loan broker first shortlists suitable lenders according to your refurbishment requirements. Once you choose a lender, the broker can bargain on the applicable rate of interest. If that does not work, the broker can suggest you more options.
Find your Loan Deal

FAQs

What types of refurbishment are acceptable for a bridging loan?

There is a list of works for which you can apply for a renovation and redevelopment bridging loan. If your refurbishment plans fall under any of the following works, call us to find a lender for you. TheBusinessFunds has multiple refurbishments bridging finance options for every work type.

  • Any general refurbishment project - commercial /residential
  • House-to-apartment conversion
  • Commercial to residential conversion
  • Refurbishment for buy-to-let purpose
  • Property extension refurbishment such as conservatory or loft
  • Residential-to-HMO is a multiple-household conversion
What are the benefits of redevelopment bridging loans?

It is a great question to ask because there are multiple benefits of refurbishment bridging loans. Read below and you can understand how beneficial it can be for you to choose this loan option.

  • Higher loan-to-value ratio: In refurbishment bridging loans, the LTV is much higher. It is 75% to 80% of total property value. Due to this higher LTV ratio, businesses can get access to a considerable amount of capital.
  • Speedy and flexible: Refurbishment bridging loans are speedy in procedure and flexible in rates and repayments. You can obtain funds in a maximum of one week. By the end of the week, you can start using the funds for the purpose.
  • Multiple types: You can obtain funds for commercial, residential and mixed property (commercial/residential) refurbishment requirements. Depending on the property type, the loan type changes.
For what type of properties are refurbishment loans applicable?

Refurbishment loans are useful for a number of properties, these include -

It is always better to take professional advice on bridging finance for property refurbishment. TheBusinessFunds offers you the most relevant suggestions on lending companies. Our experts scrutinise your requirements and find the best deals for you.

Is there any restriction on the use of funds?

Yes, there are certain reasons for which you can use the funds obtained through the renovation bridging finance. You cannot just obtain funds and use them for any random purpose. For the following specific purposes, you can use the loan money.

  • For investment in commercial or residential properties
  • To repay personal debt
  • To transform a residential property into a commercial one
  • To purchase of refurbish a mixed use property
  • To renovate after winning the bid at the auction of a property
Is it possible to extend the term for a redevelopment bridging loan?

Yes, it is possible to extend the loan term, but it all depends on your personal circumstances. It means an exit strategy should be there. In this case, your repayment capacity is always the most important factor. However, your credit history will also be taken into consideration. You may have good repayment capacity for the future, but if you have missed repayments in the past, an extension can be declined.