In the main, this is finance where there is NO development being undertaken.
The bridging market is more commonly used by property investors opposed to developers, who wish to plug the gap before refinancing onto a term loan. It is a very saturated market, highly competitive and readily accessible.
As our remit is property development finance, our finance providers typically DO NOT consider bridging finance where there is no possibilities for future development.
We’ve seen an increase in demand for this type of finance, also marketed as ‘developer exit’ loans. These loans are generally only attainable once the build or conversion is complete (at practical completion / wind & water tight). This type of finance facility is popular where a developer needs to refinance away from the core development finance facility.
As mentioned above re developer exit loans, a few common reasons this type of facility is used are: if the lender cannot extend terms, more time is needed to sell the properties, it is cheaper than core development finance, and where the developer needs to withdraw some capital to purchase another site/project.
Development exit finance
Land/Property without planning permission
Given the implications of COVID, including construction delays and increase in material costs, the developer was approaching his term end however not all properties were sold. The developer was able to refinance the facility onto a developer exit loan increasing the months required to sell the remaining properties.