Low Cost Drawdown Bridging Loan for Development Exit

Even the most experienced developers can find themselves needing additional funding to complete a project - and getting the right advice at this stage can mean the difference between a profitable development and a costly mistake.

This case study demonstrates how specialist advice can save developers tens of thousands in financing costs, even if they've received conflicting advice from multiple sources.

The Scenario

Our client was an experienced developer working on an ambitious project in Kent - the conversion of a social club into four flats, plus four new houses in a ground-up development.

With an impressive gross development value (GDV) of £3.9m, the project was already well underway and self-funded through profits from previous developments.

Some quotes they’d received had rates exceeding 1% per month - a substantial cost that would eat into the development's profitability.

With Christmas approaching and completion deadlines looming, the client needed clear guidance and a cost-effective solution for raising the £900k required to finish the development.

The Solution

Rather than immediately approaching specific development finance lenders - who typically charge higher rates - we identified a bank offering a heavy refurbishment/development product that would be more cost-effective for our client.

This was a bank that the clients’ previous broker had advised would be inapplicable for their project.

However, through our understanding of the market and relationships with the lender, we:

• Secured an 18-month bridging loan term at just 0.63% per month interest
• Structured the loan with rolled-up interest providing greater flexibility on cash flow
• Arranged flexible drawdown facilities, meaning interest would only be charged on the amount actually drawn down at given time periods
• Completed the entire process within two months
• Met the crucial pre-Christmas completion deadline

This approach saved the client tens of thousands in interest compared to the rates quoted by other brokers, and perfectly illustrates why specialist bridging finance expertise can make such a significant difference to development projects.

For developers facing similar challenges, whether it's your first bridging loan or you're an experienced borrower, we encourage you to get in touch. The right expertise can make a substantial difference to your bottom line.

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