If you are looking for ways of financing your property development, a bridging loan is one of the most popular methods of raising the funding that’s needed.
Bridging finance helps property developers finish working on a project in the expectation that as soon as it is finished, they can sell it and repay the loan. As long as you own a property, you are eligible to apply for bridging finance to help you with your development.
At the beginning of the project
If you or your company has the money to buy the property, but not enough to develop it to the high standard required to make a significant profit, the best course of action would be to apply for bridging finance against the value of the property. Bridging loans have the advantage of a speedy approval system based solely on a professional valuation – no background checks or credit checks – and immediate release of funds once the loan has been approved and the contract signed.
When there’s likely to be a delay
Once you have started the development work, you may hit a snag that would mean that, without extra support, you would be unable to complete the work you are doing. In such a case, by applying for a bridging loan based on the value of the property you can arrange the finance you need to finish the work quickly, with minimal fuss, and without causing a long hold up in the development.
Alternatively, you may complete the redevelopment work and be eager to move on to your next project but find there is an unexpectedly long delay in selling the property. You may spot an amazing opportunity to buy your next property at auction before you’ve finished or sold your current development and need to raise finance for it now in order to take advantage of the circumstances. Bridging finance will enable you to purchase your next property and begin the renovation work as soon as you need to.
To consolidate other loans
If you or your company has had to take on a few loans over the course of a project, you could apply for bridging finance to consolidate them into one manageable loan that will be repaid as soon as the property has been sold.