Bridging & Development Finance
Bridging loans are secured against property, and are typically short term, ranging from 3 – 12 months. They are typically used when purchasing a property or carrying out light refurbishment. When assessing a bridging facility, the lender will always want to understand what their exit is. This could be refinancing the property onto a longer-term mortgage, sale of the property or repaying them through other means. Bridging may also be used when purchasing land for development.
Development finance refers to heavier refurbishment, or even ground up developments. As well as evaluating their exit, a lender is typically looking at their borrower’s experience as developers, and the experience of the team around them.
FAQ
Can I use a rental property as security?
Yes. In fact, many lenders prefer to take rental properties as security for bridging and development finance. Some lenders will also accept HMOs as security.
Will I need a valuation?
Yes, a full valuation will be required prior to the loan being agreed. A lender will work witha panel of valuers and will instruct them to contact you. You then pay for the valuation and the report is sent to the lender.
Will I need a solicitor?
You will need to instruct your own solicitor who will liaise with you and the lender’s solicitor to ensure everything is correct. If you are using the family home as security for bridging and development finance and it is co-owned, then the other party may also need to take independent legal advice.
Connect with LendEdge
Get in touch today to check your eligibility for Business Finance