Property Finance Rise Funding

Property Finance

There are many different products on the property finance market including bridging finance, development finance, mezzanine finance and commercial mortgages.

Property Finance Rise Funding

Bridging finance

A short-term secured loan for property developers and investor, bridging finance allows you move quickly on a property deal – for example, when you’re purchasing a property at auction and there’s a tight turnaround.

Loan terms are generally up to 12 months and providers want to see how the loan will be repaid in full at the end of the term, known as an exit. This is often achieved by moving the loan onto a longer-term commercial mortgage or selling the property after renovation.

Interest rates are higher than longer term mortgages due to the short-term nature of the loan and the speed they can be completed. Repayments are by monthly instalments, but some lenders may allow interest payments to be rolled up and paid at the end of the term.

Development finance

Development finance is similar to bridging finance, but it comes in two parts – a loan for the original purchase and another for the building or renovation costs.

Property developers often use this option when they find land with planning permission and will use this type of finance purchase the land and build the property. Most lenders will provide the finance in stages, with the final part paid out as the development hits certain milestones. Loan terms are usually up to 24 months and lenders will lend a percentage of the property’s initial purchase price and the full cost of development.

Which is best? Get in touch to discuss which option is best for your business.