Development Finance vs Bridging Finance

Thursday 22nd October 2015

Are you looking to complete your development? chances are you will need some finance to get the job done, so where do you turn to? There will be many finance brokers urging you to take expensive deals so which form of finance is right for you? The two most common forms of finance used commercially are development finance and bridging finance. In this post, we will discuss the pros and cons of both options.

Development Finance

Development Finance is used primarily for property developments and is usually advanced as a loan that will come in stages and enable you to purchase land or cover upcoming development costs for your project. The loan is based on a percentage of the gross development value and will dictate how much you can borrow and how much the repayments will be.

Bridging Finance:

A Bridging loan is often used as a short term funding option to “bridge the gap” that will enable you to pay off upcoming debts within property transactions. Bridging finance loans can be invaluable to property developers but are significantly more expensive than development finance or any other regular loan.

With bridging finance, you will get a large cash injection towards your project however the repayments are often very expensive and missing them will cause your project to be repossessed if you continually fail to meet them.

Focus Commercial specialises in both development finance and bridging finance. for more information on what type of backing you need for your project get in touch with a member of our experts in one of our offices near you.

London Office: 0208 017 1221
Liverpool Office: 0151 556 1122
Glasgow Office: 0141 375 1155

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This post was written by Lewis Peters

October 22, 2015 11:26 am Published by