Bridging Finance for Developers

Developers often use bridging finance when they need to move quickly with an opportunity or when other types of borrowing are not available or appropriate. Bridging loans can offer a fast, flexible way to borrow, making them an attractive option when speed is of the essence.

Using bridging loans for development finance

It is often possible to access a bridging loan in as little as a few days and loan terms generally last anywhere from 1-18 months, with longer loan terms also sometimes an option.

Bridging loans can be used for a number of development projects, including:

• Buying development sites

• Funding construction works

• Buying unmortgageable property for renovation

• Converting commercial buildings and offices into residential units

When you take out a bridging loan you have to specify an “exit strategy” explaining how you will repay the loan by the end of the agreed loan term. For developers, this will usually be by selling the property or refinancing.

How much does bridging finance for developers cost?

The main costs of bridging finance for developers are:

• Arrangement fees (typically 1-2% of the capital)

• Interest (normally charged monthly or 'rolled-up' and paid alongside the capital at the end of the loan term)

• Exit fees (also normally 1-2% of the capital – not all lenders charge exit fees)

One big plus of using bridging loans for developers is that you can usually have the option to take the money in instalments as a project progresses. You only pay the interest on the money you have already taken, meaning you can minimise the cost of your borrowing.

Compare bridging finance for developers

If you need short-term development finance, our free bridging loan calculator can help you quickly and easily find the money you need. All you have to do is share some basic details about your borrowing needs and financial situation and we will find you the best deals on bridging finance from across the market.

Looking for bridging finance for developers? Get in touch with our friendly expert team of loan brokers using the contact form on the right or by calling 0117 313 6058.