bridging loans
Finish and Exit Bridging Loan.
Specialist Bridging Loan Broker Since 2004.
To get your development project over the finish line with this relatively straightforward exit route, get in touch with Tiger Financial today.
If you’re nearing the end of your development project, but you’re concerned your finances won’t quite stretch all the way, or you’ve run out of funds or time, and you won’t be able to complete the works, then you need a short term funding solution such as a finish and exit bridging loan.
To get your development project over the finish line with this relatively straightforward exit route, get in touch with Tiger Financial today, and let our specialist brokers, with their unrivalled knowledge of the market, find you the ideal funding solution for your project.
Please note: the difference between an open bridging loan and a closed bridging loan is simply whether there is a guaranteed exit from the bridging loan; in other words, if there is a simultaneous exchange and completion of a sale on the day the bridge loan completes. The application process for an open and a closed bridging loan is the same regardless.
What Is A Finish And Exit Bridging Loan?
When you’re involved in a property development project, you want to ensure that it’s completed as quickly and efficiently as possible. But finishing work on time can be difficult if you don’t have the right funding facilities to complete the job. A development exit bridging loan is a flexible funding option that can help you get the funds you need at short notice.
For property developers, the dream is to finish and exit each project within budget, on time, repay any bridging loans, and move onto the next development. However, things don’t always go to plan.
So, if you’ve come to the end of the loan term with your existing development finance facility and your project isn’t yet complete, or you’ve run out of funds to complete your development project, then you need an exit bridging loan.
Development exit loans provide funding for partly completed development projects. Because usually, if your units aren’t complete, or you’ve not begun developing them, it is unlikely that you’ll meet the eligibility criteria to access development exit finance.
With a finish and exit bridging loan you refinance your existing lender. The loan term is typically the same length as other bridging loans – 12-18 months, and the repayment terms are interest only, and are usually rolled up and added onto the loan amount, repayable at the end of the loan term. The new lender will remain in place until you’ve achieved your desired exit strategy.
So, if your project is running out of time on the existing development finance loan term, finish and exit bridging finance could bring your development to a practical completion, without having to extend your existing loan facilities.
This type of development finance allows property developers and investors fast access to additional funds, as well as giving them breathing room (and a time extension), to finish the project and sell the remaining units, without the need for them to be windproof or watertight.
Types of property suitable for a finish and exit bridging loan?
Finish and exit finance is a financial solution to provide support for developers who can’t complete their project within the existing timeline, or get to their exit plan because they still need more time and/or money.
This type of finance is commonly used for:
- Refinance of an existing development finance loan
- Extra funding for a project that has almost reached practical completion and before it is elgibile to get a longer term mortgage.
- A project that needs a little more time to sell any remaining units or refinance as buy to lets.
There are many different property types that a finish and exit bridging loan can be used to finance. There are no restrictions on what type of property you can use this type of finance for and there are currently no guidelines placed upon what kind of properties will qualify for such a loan.
Examples include:
- Commercial properties, such as office blocks or retail outlets
- Industrial units, warehouses and factories
- Residential homes
Benefits of finish and exit finance.
Reduces borrowing costs while giving access to additional funding
The main advantage of using this type of finance is that it gives developers the opportunity to finish their project on their own terms, while avoiding penalty fees and/or accruing additional interest on existing loans.
Gives developers extra time to complete the project and sell any remaining units.
If you have existing development loans, rather than extending the loan term and risk paying penalties for not repaying the loan within the original loan term, finish and exit finance is a short term bridging loan that will allow you to pay off an existing development loan, as well as provide you with additional funds and time to complete the project.
The cost of taking out finish and exit finance.
A finish and exit bridging loan will come with additional fees that you need to be aware of. These can include (but aren’t limited to):
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Depending on the bridging lender, the early repayment charge is a fee you pay if you repay the loan within the minimum period, typically the first 3 months.
This is the same as an exit fee. Not all bridging lenders charge an exit fee, but some do. If yours does, expect exit fees to be around 1% of the borrowed loan amount.
Not all bridging lenders charge an exit fee, but some do. If yours does, expect exit fees to be around 1% of the borrowed loan amount.
As well as the cost of the product, lenders can charge you a fee to access the money. This fee will vary between bridging lenders.
Because bridging loans are recorded as a ‘charge’ against the property, at the end of the loan term when the loan is repaid, this fee relates to the charge being removed from the property.
As well as having to pay your own solicitor’s fees, many lenders require you pay their solicitor’s fees too.
Lenders will need to inspect the project in order to value it and make sure it is worth what you say it is, should you default on your payments and they need to repossess it and sell it to recoup costs. If you’re using multiple assets to secure the loan, lenders may charge multiple valuation fees to assess the value of each.
Also called a product fee, most bridging loan lenders will charge you this fee to organise the loan. The fee is usually a percentage of the amount of money you’ll borrow. It can be between 1-3%.
Because bridging loans are a specialist type of finance, most lenders won’t deal with applicants directly, they only deal with intermediaries. But that’s not the only reason to work with a broker – they will also help secure you the best deal, negotiate on your behalf, and make sure your application is as strong as it can be. Broker’s fees tend to be a percentage of the amount you’re borrowing – between 0.5-2%, or a flat fee.
Let Tiger Financial broker you finish and exit bridging finance.
For flexible short term finance to bridge the gap, enabling you to finish your development project and exit your existing loan facilities, get in touch with Tiger Financial today.
As one of the UK’s leading specialist bridging loan brokers, we understand that you need access to property finance fast.
Applying for bridging finance through Tiger Financial is easy; to begin your application, get in touch with our friendly team today.
Regulatory Information:
Tiger Financial Ltd is a financial services company registered in England and Wales no: 10225910.
Tiger Financial Ltd is directly authorised and regulated by the Financial Conduct Authority (FCA) no 915106.
The FCA does not regulate all mortgage, commercial mortgages or bridging loan and development products. Think carefully when you buy a property before securing debts or credit against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
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