Linking finance is effectively a short-term loan, normally used for a period of up to a year that can be used for a quantity of purposes from combining debts, purchasing new property or undertaking an office refurbishment. Property developers often turn to bridging fund as a short-term solution that will allow property refurbishment or builds to commence set up first injection of cash is not present. Whether you are a tiny property programmer working on just one particular or 2 properties a year or an founded property development company with many schemes, property development finance is available to you. Builders cardiff
How can property builders use bridging finance?
A large number of property developers use linking finance as a way to buy property at auctions, or new developments as well as to undertake advancements, conversions and refurbishment. This kind of injection of finance allows developers to get jobs made its debut in the absence immediate funds. Some property programmers will also use linking loans in order to mortgage restaurants, to get buy-to-let properties or raise seed money.
Below is a good example of when and how a property developer may call on a linking loan:
A developer has viewed two properties, both require refurbishment and both present an attractive and lucrative resale opportunity. The properties are known amidst the property developer community and there has recently been interest from a quantity of parties, speed is therefore of the essence or another developer will secure these properties. A linking loan can be put in position where a normal mortgage application could have lead in the property heading to a different developer who acquired the funds immediately available. Bridging finance can be made available at brief notice particularly if both the property and developer present a reputable investment, this allows the developer to buy the properties and commence his renovations.
This kind of is a vintage example of when a linking loan can secure a property for the creator; it allows the designer to secure the exact property without the need to sell any of their existing property or assets. This kind of is particularly useful when property is bought for the sole purpose of immediately selling it on again at a higher price. By using bridging finance the only additional cost for the developer would be the interest paid on the short-term bridging loan.
Linking loans are also great for those developers who want to reduce or reorganise their costs and equity or are looking to execute draw lows across an investment stock portfolio to release some cash.