Development Finance and Bridging Loans

Development Finance

This is available whether you are building a block of apartments, an estate of individual properties, an industrial unit or even a shopping precinct. In these situations financiers use the development as security and lend in stages so that in theory their security is enhanced as they drip-feed money into the project.

Repayment is usually achieved either from sale of completed units or conversion to a long term loan to be serviced perhaps from rental income or delayed sale of the whole unit.

Bridging loans

These can be arranged for a variety of purposes including the funding of the purchase of an item (usually a property) pending the sale of another.

This type of loan is usually for periods of up to 12 months and lenders are keen to identify the anticipated source of repayment (eg a long term loan with another lender).

The lender gains security from the property to be sold and sometimes also the property being purchased.