Bridging Loans & Finance for Property Developers

Property Development Bridging Loan

Bridging finance for property development is an effective way to secure short-term funding so you can get the ball rolling on your next project. These types of property development loans are fast and flexible, enabling you to invest in land, foot building bills, or bridge the gap between funding stages in your development project timeline.

At Pure Property Finance, we specialise in property development bridging loans tailored to your specific needs. We’ll provide exclusive access to competitive rates and reliable lenders, all within a short timeframe.

What is a Property Development Bridging Loan?

A property development bridging loan is a way of securing short-term finance to fund a development project throughout its key stages. Normally, budgets secured this way go towards purchasing land or property to be used for development, bankrolling conversions or other renovation work, or helping tide developers over between various stages of the project.

Occasionally, development bridging loans would also be used as a temporary cashflow solution until longer-term finance is secured.

What sets bridging finance for property development apart from traditional loans or mortgages for developers is the speed at which applications are processed, and the term of the agreement (normally between one month and two years). At the end of the term, customers repay the lump sum – either following a property sale, or through long-term refinancing.

How Does a Development Bridging Loan Work?

Bridging loan providers specialise in offering customers quick access to essential capital, often for residential and commercial projects. In the case of a property development bridging loan, this would be short term finance for development projects specifically, which is secured against the property being purchased, or the development site land.

The speed and outcome of the development bridging loan application depend on several factors, including the specifics of the project, overall budget, and the developer’s exit strategy. Once the valuation and legal checks are complete, bridging loan providers will issue the terms based on all these factors, and usually release the funds within a fortnight.

Depending on the criteria of your property development finance provider, you’d often borrow against the gross development value (GDV) or the current market value of the development project.

What are the Advantages of Development Bridging Finance?

Using bridging finance for property development comes with a range of benefits, including:

Speed: Funds can be in your bank account within days, ready to be used. This is especially handy for time-sensitive development project opportunities or auction purchases.

Flexibility: Whatever your property development finance needs, short term finance can be tailored to each project with features like rolled-up interest or staged drawdowns.

Shorter commitment: Compared to more traditional funding solutions, property development bridging loans normally don’t stretch beyond the 24-month mark.

Cashflow support: Bridging loans for property development can be used to support you with funds for planning permission applications, building works, or even labour.

Depending on the bridging loan providers, you might be able to maximise the amount of capital you receive, with development bridging loans of 70% or more of the GDV.

How Can Bridging Loans Help Property Developers?

Property development bridging loans can come in handy in various ways throughout a project’s lifecycle. From acting as a speedy funding solution when you want to snatch opportunities up quickly to getting things moving while you wait to complete another sale, bridging finance for property development is flexible and versatile.

These sorts of short term property development finance solutions are also useful if you need funding for a refurbishment project, but don’t qualify for a mortgage for developers, for instance. Plus, a development bridging loan allows you to bankroll various parts of your pipeline by using just one asset as security.

Bridging finance for property development can be used for building new housing, building upgrades and conversions, or even just quickly seizing an attractive opportunity off the market.

Who is Eligible for a Development Bridging Loan?

Whether you qualify for a property development bridging loan depends on the individual criteria of bridging loan providers. Some common things they look out for include: credit history, development experience, location (whether you’re UK-based or offshore), exit strategy, and – of course – what you’re offering up as security.

The Pure Property Finance team work with a range of bridging loan providers, so we’d be able to find the right fit for your circumstances and your project needs.

A development bridging loan may be suitable for you if you are:

• Purchasing a property at auction and your mortgage is unlikely to come through within 28 days.
• Purchasing a new property but haven’t managed to complete the necessary sales to fund it yet.
• Renovating a property before refinancing at a later date.

How Long Does it Take to Get Funds?

Development bridging loans are a short term finance solution designed with a quick turnaround in mind. Depending on how complex your individual case is, funds should appear in your account between five and 10 working days after your application is approved.

For development projects on tight deadlines or special circumstances like auctions, bridging loan providers might be able to prioritise applications, so make sure to give your lender a heads up.

Why Choose Pure Property Finance?

At Pure Property Finance, we’re experts in property development bridging loans. We work closely with developers to make sure everyone secures the right funding for their requirements – whether that’s individual residential buildings, or large-scale development projects.

In addition to the professional guidance and fast turnarounds we offer, our team also has access to a range of specialist lenders, some of which won’t be available to you as an end customer.

We’ll support you every step of the way to securing property development finance – we can arrange development bridging loans for residential and commercial projects alike, with your unique goals in mind.

Reach out to our team to discuss your development project, and see how a property development bridging loan can offer the financial backing you need for the next step.