Bridging & Development Finance Hub
Bridging and development finance are the two products people reach for when a conventional term mortgage will not move quickly enough, or when the property does not yet exist in a lettable or saleable state. They are related but they are not interchangeable, and choosing the wrong one is an expensive mistake.
This hub brings together our bridging and development pages, the calculators that give you an indicative figure before you commit, and the guides that explain how lenders actually assess these cases.
Bridging finance
A bridging loan is short-term finance secured against property, normally for three to twenty-four months. Interest is usually retained or rolled up rather than paid monthly, so there is no monthly outlay while the facility runs.
The critical element is always the exit. A lender needs to see credibly how the loan will be repaid — by sale, by refinance onto a term product, or from another identified source. A weak or vague exit is the most common reason a bridging application is declined, not the borrower’s credit profile.
- Auction purchases where completion is fixed at 28 days
- Chain breaks, where a purchase must complete before a sale does
- Properties that are unmortgageable in their current condition — no kitchen or bathroom, short lease, structural work outstanding
- Refurbishment before refinancing onto a buy-to-let mortgage
- Raising capital quickly against an existing asset
Development funding
Development finance works differently. Rather than a single advance, the lender releases funds in staged drawdowns: a proportion of the land or acquisition cost at the outset, then construction funds in tranches against a monitoring surveyor’s inspections as work completes. Interest is normally charged only on the amount drawn.
Lenders assess the scheme, the gross development value, the build cost and contingency, and your track record. First-time developers are not excluded, but the terms reflect the additional risk and the lender will look closely at the professional team around you.
Which one do you need?
The rough rule: if the property is habitable and the work is light, bridging is usually the cheaper and simpler route. If the scheme involves ground-up construction, a material change of use, or a build programme measured in months rather than weeks, development finance is the right structure — and drawing down in stages will normally cost less than holding a full bridging facility for the same period.
Cases that sit between the two — heavy refurbishment, conversions under permitted development — can go either way. That is a conversation worth having before you commit to a purchase price.
Work out the numbers
- Bridging finance calculator — indicative loan-to-value and gross facility
- Development finance calculator — indicative maximum facility against build cost and GDV
Read more
- Bridging finance explained: how bridging loans work in the UK
- Development finance: how ground-up development loans work
- What is a commercial mortgage? — the usual exit for a completed commercial scheme
- Frequently asked questions — deposits, loan-to-value, timescales and documents
Related finance
Developers and investors rarely need one product in isolation. We also arrange commercial mortgages as an exit on completed schemes, asset finance for plant and machinery, secured loans and second charge mortgages where an existing facility should stay in place, and invoice factoring for contractors managing working capital between valuations.
Where we advise
Bridging and development cases are arranged nationally and rarely depend on being near an office. That said, a good deal of our development work runs through Willenhall, where Black Country industrial and conversion schemes are the local staple, and our bridging enquiries cluster around Dagenham and Rainham, where auction purchases and chain breaks are common. Higher-value short-term facilities are usually handled from Putney. See areas we cover for the full list.
Speak to an adviser
Tell us the property, the timescale and how the facility will be repaid, and we will tell you which product fits and roughly what it will cost. Call 020 8088 2211 or send an enquiry. All of our advisers are qualified and regulated to advise on the products they recommend.
Giles Finance is a trading style of Giles Finance & Consultancy Services, authorised and regulated by the Financial Conduct Authority (FRN 726857).
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Most commercial mortgages, buy-to-let lending and bridging finance are not regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on any loan secured against it. Nothing on this page is tax advice; consult a qualified accountant or tax adviser about your own position.