bridging loans for property development

A guide to property development finance using bridging loans

23 / 03 / 22

Bridging loans and property development seem to go hand in hand – and for good reason! This short term finance solution provides fast, effective financial relief which is perfect for developers and investors looking to add to their portfolio or renovate a property.

Here’s our beginner-friendly guide answering how bridging loans and property development works.

What is property development?

Property development is defined as the business process of purchasing and renovating properties as well as the purchasing of land with the intention to build new properties. 

How bridging loans can be used in property development

A bridging loan is a great tool that provides solutions to a number of issues property developers and investors may encounter during a project. This is because bridging loans supply fast funds to relieve financial kinks and ensure property development continues smoothly and completes on time.

Bridging loans can be used during property development by people renovating dilapidated, un-mortgageable properties which include those without bathrooms, toilets and kitchens.

This funding option can also be used to take advantage of property market conditions and to help finance negotiations as to not lose out on those unmissable investment opportunities.

Who can use a bridging loan for property development

Bridging loans aren’t suitable for everyone. They’re typically targeted at professional individuals for business use and aren’t available as an alternative to mortgages, credit cards and short-term personal loans. 

This doesn’t mean you have to be a business to use a bridging loan; they just have to be used for business purposes unless the lender is regulated by the Financial Conduct Authority. Bridging loans can be used by a range of people with different requirements.

Homeowners and property owners

Homeowners and property owners can use bridging loans for the following needs:

  • To prevent missing out on purchasing a new home in a broken property chain
  • Purchasing a property prior to the sale of an existing home
  • Securing a property quickly
  • Temporary cash flow relief 

Businesses and commercial uses

Business and commercial bridging loan use can include but isn’t limited to:

  • Meeting business obligations
  • Raising capital within a short timeframe
  • For tax liabilities

Property development uses

Bridging loans can be used in the following ways by property developers:

  • Financing un-mortgageable properties
  • Relieving financial shortages
  • Renovation and development of properties

If you’re unsure if you’re eligible for our 3-day bridging loan, get in touch to discuss your requirements. We’re happy to help! Simply call us on 01704339588 or fill in our form and we’ll get back to you swiftly.

Which types of properties can a bridging loan be used for

You can secure a bridging loan against a variety of properties from commercial and semi-commercial, residential and land. Our 3-Day Bridging Loan currently only considers applications against residential properties in England, Scotland and Wales. 

Can bridging loans be used on un-mortgageable properties

Short answer; yes! Using a bridging loan to finance the purchase of an un-mortgagable residential property is a popular choice amongst property developers and property investors. 




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