Development Exit Bridging Loans
Development exit bridging loans are bridging loans that are specifically designed for property developers who have completed a development project and need to repay their existing development finance. These loans are typically used to bridge the gap between the end of the development project and the sale or refinancing of the property.
Once a development project is completed, property developers may be required to repay their existing development finance within a certain period. However, if the developer cannot sell or refinance the property within that time frame, they may need additional funds to avoid defaulting on their existing loan. This is where a development exit bridging loan can be useful. These loans can provide the developer with short-term financing to repay their current development finance while they work on selling or refinancing the property.
Development exit bridging loans are secured against the developed property, and the loan amount is based on the property’s expected value once it has been sold or refinanced. These loans can carry higher interest rates and fees than traditional mortgages due to their short-term nature and higher risk. However, they can be helpful for property developers who need quick access to funds to repay their existing development finance and avoid default.
It’s essential for borrowers to carefully consider the costs and risks associated with development exit bridging loans and to work with a reputable lender or broker who can provide clear and transparent information about the loan terms and conditions. Additionally, borrowers should ensure a clear and viable exit strategy for repaying the loan once the property has been sold or refinanced.
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