Table of Contents
What is it?
Bridging and development finance are both short-term funding options, mostly used for property projects. Think of them as “gap fillers” — they help you move quickly when traditional finance won’t cut it.
- Bridging finance is typically used to “bridge the gap” between buying and selling property, funding auctions, covering renovations, or sorting quick purchases.
- Development finance is aimed at funding construction or heavy refurb projects — whether it’s ground-up building or turning a warehouse into flats.
These types of finance are usually interest-only, secured against property, and repaid once the project is sold or refinanced.
Pros and Cons
| Pros | Cons |
|---|---|
| ✅ Fast access to large sums | ⚠️ Usually more expensive than traditional loans |
| ✅ Great for auction buys, time-sensitive deals, or fixer-uppers | ⚠️ Can require a hefty deposit or equity in existing property |
| ✅ Development funding released in stages to match build progress | ⚠️ Short terms – usually 6 to 18 months |
| ✅ Interest is often tax-deductible as a business expense | ⚠️ Secured against property – risk of losing it if things go wrong |
| ✅ Ideal for property developers or investors | ⚠️ Lots of paperwork: valuations, build plans, cost schedules, etc. |
When is it a good fit?
Bridging and development finance is worth a look if:
- You’re buying property at auction and need to move fast
- You’re waiting for another sale or mortgage to complete
- You’re building from scratch or doing major renovations
- You want to release equity in a property to fund a project
Extra tips and things to consider
- You’ll usually need to show a clear exit strategy – i.e. how you’ll repay the loan (sale, refinance, rental income, etc.).
- Most lenders require detailed plans, timelines, and costings for development projects.
- Bridging loans can be arranged in days – but don’t leave it until the last minute, especially if legal work is involved.
- Interest payments and fees may be deductible if the finance is for business or investment use – but always double-check with your accountant.
Still unsure?
If you’re a developer or investor wondering whether bridging or development finance makes sense for your next project, we can help talk it through.
Try our [Finance Finder Tool] or drop us a message for a chat – we’ll help you find the right lender and steer clear of the cowboys.
