One of the biggest threats to a successful construction project is experiencing cash flow issues, or worse still, running out of financial resources before the project is complete. Having to halt the build or renovation means you may struggle to meet time sensitive milestones and will invariably increase the cost of the overall project. Worse still you may even run into losses.

The smart developer will be prepared for unforeseen funding issues that may impede the projects progress and where the required funds are not available may make use of a property development bridging loan.

Whether you are undertaking a residential or commercial development project, a bridging loan is probably the best funding option to keep the project rolling during funding problems to minimise any cost overrun. Property development bridging loans are secured loans, and commercial or residential property or land can be used as collateral. You will normally be able to raise around 75% of the valuation of your collateral.

A big advantage of a bridging loan is they can generally be arranged in a very short time span which is not usually the case with the high street lenders. This can help to avoid project delays. These benefits do come at a premium in terms of interest rates but as this type of loan is a short term solution it may still work out in your advantage if project delays are avoided. Another advantage is that the principal can be repaid after the loan period so you only need to fund the interest whilst you complete your project and then funds from the resale can be used to repay the principal.

To summaries, if your property development project is liable to be delayed as a result of funding problems a property development bridging loan may be a solution well worth considering.

There is a lot of competition in the market place for bridging loans so be sure to choose a lender that does not charge any exit fee, offers daily interest with no hidden or additional costs other than the required fee for the valuation of your collateral and any legal fees.