Introducing a Three-Part Series on Bridging Finance by Thomas Berry
Over the next three weeks, I will be publishing a series of articles exploring the intricacies of bridging finance and the variety of uses. Bridging finance is a very useful tool and can provide solutions to problems that on first glance, will be difficult to solve. There is a lack of awareness surrounding the bridging products on offer and the solutions they can provide, and I want to provide more insight into this.
Use: Development Exit Bridge
Problem : You have a number of units left to sell and the end of the loan term is fast approaching
In the current climate, developers are finding that the speed of new build sales has slowed down. By the time your development facility needs to be redeemed, there is a strong possibility that a number of units will remain unsold. Depending on how many of the units have sold to-date, you may be in a position where the current loan-term versus the sale of the units is not running parallel.
Solution: At Arc & Co. we can implement a development exit bridge loan to facilitate a longer sales period for the client; ultimately eliminating any risk of a default rate.
Problem: You’ve spotted a new development scheme whilst completing a current project
Whilst securing the remaining sales on a current development project, it is very common for a developer to spot a new opportunity which they are keen to secure. However, liquid cash can be limited due to your equity being locked into the current development project.
Solution: At Arc & Co. we can design and structure a bridge loan to enable the release of capital from your current project, allowing you to fund your next project. By opting to refinance the current project, this allows you to utilise the embedded equity at a much faster rate and to go on to secure the next project.
Coming up: A short guide to first- and second-charge bridging solutions.
If you would like to speak to myself or any of the team about a bridging requirement, please contact me by email: tom.berry@arcandco.com or phone: +44 (0) 20 3205 2192