A 1st charge Bridging loan is used when the property is unencumbered (no existing loans or mortgages secured against it) or if the existing lender is being cleared using some or all of the proceeds of the bridging loan. On occasions 2nd and sometimes 3rdcharges are often arranged where a borrower requires more funds by way of capital raising. This sits behind the 1st charge mortgagee with their consent to lend.
We typically can lend to land, with or without planning, Residential Houses/Apartments, Semi-Commercial, Commercial Buildings with or without Planning and change of use.
1st Charge Bridging Loans can be raised up to 80% – 85% of the purchase price/value.
2nd Charge Bridging Loans can be raised up to 70% – 75% of the value.
‘Just Bridge It’ receives many enquiries from borrowers that have had problems getting their exit perfected. Either their property sale timescales are elongated due to a property chain or it simply has not sold or the exit lender providing a ‘Buy To Let’ mortgage is still requiring further information to make an agreement in principle unless it is still being held up in the legal process.
A re-bridge is simply a re-finance of an existing Bridging Loan that is coming towards the end of its agreed term. It maybe that something has changed within the term that has delayed or halted your exit so rather than pay expensive default rates to the current lender, speak to one of the team to arrange your new ‘re-bridge’ facility.
When refurbishing a property, getting the right finance is essential for a successful project. We have lenders that will not only finance your purchase but will also lend a large percentage of the refurbishment costs too. We have products for your refurbishment should you be entertaining a light refurb, medium or heavy refurb.
We offer our property refurbishment clients:
- Refurbishment finance from £100K
- Access to market leading rates
- Flexible finance terms up to 24 months on simple & complex refurbishments
- Finance for new build, conversion or refurbishment developments including mixed use and student accommodation
A few months ago we had a client that agreed to purchase an apartment in Chelsea that had a short amount of years left on the lease. The purchase price was just £550,000 due the only having 18 years left to run on its lease. For any prospective purchaser there is little value buying an apartment of this nature unless they could extend the lease.
To purchase another lease for 125 years this would have cost the vendor or a purchaser a further £150,000. The total cost of the apartment and lease is £700,000 excl. professional fees and interest. Once the lease has been purchased the value of the apartment will be worth £1,050,000 which will give the owner £350,000 more value on Day 1!
We are generally able to finance these opportunities where the borrower puts their deposit in on Day 1 (25%-30%) with the lender financing 100% of the lease cost assuming that the end value falls within 70% of the projected end value with the benefit of a new lease in place.
There are many opportunities in and around London where traditional mortgage companies are not able to help and we are set up to do so. As a result of this specialist knowledge and funding we tend to see many vendors heavily discounting these types of properties due to the expensive liability.
Bridging Finance is a great product to use to purchase properties at auction because it can be arranged extremely quickly and fits neatly into the purchasing timescales of the auction houses whether there is a 2, 4 or 6 week deadline. We always advise potential borrowers to give us a call prior to bidding to ensure that we are ahead of the curve if they are successful with their bid.
Have you ever wondered if you can fund a property by negotiating hard with your seller and using that discount as part of your deposit? We have many lenders that will assist up to 80-85% of the value NOT just the purchase price.
- Value £400,000
- 80% of value £320,000 Gross loan
- Purchase Price £340,000 (condition for discount, for example: 21 day completion/distressed property)
- £20,000 deposit required to make up to the purchase price (excl. interest, arrangement fees, professional fees)
Development Finance can be expensive finance due the risk of the project and lenders price the facilities accordingly. Once the project, whether this be a house or houses within a small or large development or apartments within a conversion we have a product that allows you to exit the development to allow you a period of time to market for sale your asset/s by refinancing to a much cheaper rate.
The ‘Development Exit’ product historically was offered to borrowers the exit at ‘final certificate stage’ however with more lenders coming into the market we now have access to lenders that will consider your exit at an either ‘wind and water tight’ stage (windows in, roof on) or when Practical Completion has been awarded.
In addition to repaying your development finance lender, some of our lenders also offer the option for our developers to raise capital on their asset for the purchase of other sites and we also have options from other lenders that will allow a percentage of the sale of each unit in as capital to further improve your cash flow.
Rates start from 0.45%pm with No Exit Fees with loans up to 80% of value
We also have access to lenders which provide ‘Finish & Exit’ development finance. This is for residential development projects which have been delayed and are therefore running out of time with their existing development finance facility.
The ‘Finish & Exit’ development finance allows developers to refinance their existing development finance facility, continue to drawdown funds to complete the development and gives them time to sell the units once the development is completed. This criteria cannot be achieved under a normal ‘development exit’ loan but can be fully accommodated with the ‘Finish & Exit’ product.
Rates start from 0.45%pm with No Exit Fees with loans up to 80% of value.
A popular product for many landlords is a product offered by a few lenders known as the ‘revolving credit facility’ which is a line of credit where the borrower raises a fixed amount of funds against an existing security or multiple securities. They will pay an arrangement fee to the lender for the amount that is available and will be able to use the funds when and as are needed.
Many of our borrowers use this product either for cash flow purposes in their current businesses, pay a forthcoming HMRC bill or simply to purchase properties at auction or otherwise and typically present themselves as a cash buyer rather than wait for the legal process.
Typically a credit line of this nature will usually be offered as a 12 month term however new entrants to the market are pushing these facilities beyond this term and it may be advantageous to speak to one of our brokers of what may be available to you.
If you are looking to source additional finance on a residential or commercial property in the UK we can help.
- Finance for residential, mixed use, care homes, healthcare, commercial and hotel projects
- Coverage in England, Scotland & Wales
- From £100,000 to £10 million
- 1 to 3 year terms
- Mezzanine funding up to 20% of costs
- Senior debt and mezzanine up to 90% LTC
- Bespoke pricing
- Single units to 20+ unit projects
“When the possible seems impossible, one phone call to Esther Bennett and her amazing team is all you need to do! Well done to the brilliant Development Money team!”
Mark Ellis … Many thanks for your time on the phone yesterday and I appreciated your honesty. I will definitely be in touch again when I have another project to fund.
For the past 4 months I have been tirelessly working to refinance onto a Development finance package. Don't let anyone let you think it's easy! I have been more than lucky to have a great team of brokers, solicitors and friends and family behind me. So pleased today to hear it's all gone through as planned. Now the real work can begin. Thanks to Karl Mitchell, Esther Bennett at Development Money. (Testimonial taken from Development Money Bridging Finance, Development Finance and Commercial Finance Facebook page)
“Just a mention and a massive thank you to Esther Bennett and her team today for the very inspiring meeting we had today. I cannot speak highly enough of her attention towards her clients in working out the best ways forward to allow financing of property purchases using creative finance. Thank you Esther, looking forward to working with you for the long term. Anyone else looking at Bridging and Development finance..... don't look any further!”
“In one of my most stressed/testing times, Karl has been an absolute star. Could not be more helpful, and I have to say stands out head and shoulders above the other 3 brokers I have been dealing with.”
“I just wanted to drop you a line and say it's been a pleasure working with Lesia Chomiak. There was a delay on the vendors side but I must say the transaction was very simple and not overly complicated like other lenders! She is a credit to your team”
Sampson Homes Ltd
Mark Ellis … excellent staff member who talked me through my options. A credit to the Company.
Had numerous dealings with Esther and her team. They have helped with Commercial refinancing and Bridging loans for our developments. Great communication, great service and great people!