Don’t like the sound of it? Think on…
It is not the cheapest form of finance that’s for sure. But if you need money quick and you can’t wait around for the lenders, bridging could be the answer. Typically turn around is 4 weeks, but can be as little as 4 days.
The key to bridging is you make it work for you. Banks (if they are lending on development projects at all) will only give you a percentage of actual costs to calculate the level of lending they will provide. Whereas bridging lenders will lend you a higher percentage based on Loan to Value (LTV) or Gross Development Value (GDV). This means less for you to find personally or to have financed through stretch or mezzanine lenders who are even more expensive than the bridging lenders!
Bridging is typically used for:
- Auction purchases, where completion is due under 28 days
- Chain breaking
- Stopgap finance to keep projects moving
- Development exit, to pay back the lender and hold while you wait for sales to complete/prices to return to where you need them
All bridging finance lenders need to know there is an exit strategy to repay them ie another form of finance or sale of the property to repay their lending at the end of the agreement.
If you need finance quickly and you want to see if the costs work out for you, pick up the phone and let’s talk it through.