Funding Your Property Development Project Made Easy

Starting a property development project can be exciting… but securing the right funding is key to success. Whether you’re refurbishing a property or building from scratch, understanding your financing options will help you stay on track. Here’s an overview of the main funding solutions available, including bridging loans and development finance.

1. Self-Funding and Private Investment

For smaller projects, you might consider using personal savings or funds from private investors.

Pros:
No borrowing costs
Full control over the project

Cons:
Limits the size of your project
High personal financial risk

2. Bridging Loans

Bridging loans provide short-term funding to ‘bridge’ the gap between purchasing a property and securing long-term finance or selling the property. They’re ideal for quick purchases and renovations.

How It Works:

• Short-term (3 to 12 months)
• Secured against the property
• Interest can be rolled up until repayment

Example:
Use a bridging loan to buy and renovate a property, then repay it by selling or refinancing.

Pros:
Fast access to funds
Flexible repayment terms

Cons:
Higher interest rates
Need an exit strategy to repay the loan

3. Development Finance

Development finance funds both the purchase of the property and construction costs, with funds released in stages as the project progresses.

How It Works:

• Covers up to 90% of costs and 70% of GDV
• Interest charged only on funds used

Example:
A developer secures finance to build apartments, with funds released after each stage is completed.

Pros:
Tailored for development projects
Interest only on drawn funds

Cons:
Complex application process
Requires detailed costings and plans

4. Commercial Mortgages

If you plan to retain the property as a rental asset or business premises, a commercial mortgage offers long-term financing.

Pros:
Lower interest rates
Long-term repayment terms

Cons:
Not suitable for early-stage funding

Choosing the Right Option

Get Expert Advice

Choosing the right funding is crucial to your project’s success. A specialist broker like us, can help you find the best solution and secure competitive terms. Whether you need a quick bridging loan or structured development finance, expert guidance can make all the difference.

Ready to fund your next project, need help on where to start?  Get in touch with us today, on 02920 766 565 or [email protected]