What is bridging finance?

We are looking for finance for property development or funding for construction projects that minimize delays and problems.

Speak to mortgage managers who think like developers and provide solutions based on end value and profitability. 

At Agility, we understand that cash flow is one of the most challenging property development and construction aspects. Keeping projects moving, contractors paid, and sites ticking along is crucial if you stay on budget, finish on time, and exit with a profit.

Many property developers experience frustration, delays, and some potentially lucrative projects fail because of a lack of suitable finance options.
Agility Finance provides bespoke, cost-effective bridging finance solutions designed and sourced exclusively for the needs of developers and constructors, small and medium-sized businesses, and commercial clients in many different sectors. When it comes to property development and construction, we bring a highly specialized mix of financial and real estate expertise to the table – and your project. That means we can offer more flexible bridging finance solutions based on the potential of your site, not just your balance sheet.
This article will examine how you can use the equity in your ongoing projects, existing commercial property, or home to minimize construction costs and development delays. We’ll look at bridging finance, why we do things differently from the banks and traditional lenders, and how your next business venture could benefit.

What is Bridging Finance? Specialist Solutions for Property Developers 

It’s an all too familiar story for property developers and builders alike. Many problems, frustrations, and delays could be avoided with a more suitable finance structure. Even sites with huge potential can’t become profitable if your hands are tied when you need to get to the next construction phase. Banks and non-specialist lenders can be inflexible, and the resulting conditions and requirements time-sapping and counterproductive.
Many of the problems associated with mainstream bridging loans are caused by how lenders assess applications and construction or development projects. Getting a building out of the ground requires a substantial amount of money for a relatively long period, and many developers need a facility that gets them to completion.
All lenders operate according to relatively rigid borrowing requirements. No matter the details of a project, it has to be viable – and that applies whether you source your finance from a bank or via a private mortgage manager. However, the primary difference between the two is that a personal mortgage manager is likely to put considerable weight on development potential, making sense when many construction and development projects return by turning a vacant plot or a dilapidated building into something more. They’re adding or building something that wasn’t previously there and turning potential into value. At Agility, we believe the most logical way to make development and construction finance more cost-effective is to harness that potential.

Development Bridging Finance with a Development Mindset

Property development is a highly specialized, demanding field, and financial options need to match those demands and nuances. At Agility, we help clients find ways to get viable projects completed. We can do that because we look and work harder than a bank. We take a much closer look and get to know your project, identify its unique potential, and help you leverage that to ensure it happens smoothly.

Traditional construction bridging loans have a few primary problems, and all of them can spell frustration or disaster for property developers:

  • Restrictive LVR requirements: Many developers can start with a construction finance application. Non-specialist mortgage managers assess projects based on what’s on the ground, not on the development potential of sites. You might be offered a constrictive LVR or even refused finance when that happens. Trudging around various providers looking for adequate finance can be soul-destroying when you’re waiting to get a lucrative development out of the ground.

 

  • Restrictive funding structures: When you’re trying to run development, non-specialist mortgage managers can make it extremely hard to access funds, which get released according to build phases. In practice, that can lead to considerable delays. Release often depends on time-consuming inspections, and the resulting wait can prove costly for developers. It causes downtime after everything from site clearance to groundworks, framing, and lock-up, and such red tape can continue until completion.

 

  • Restrictive exit options: When considering construction funding options, it’s necessary to look beyond bridging finance rates and consider the implications of signing up for inflexible solutions. If your marketing and sales go well and you’re ready to exit soon after project completion, you could get stuck with a bridging loan solution when you no longer need one. Non-specialist mortgage managers tend to offer rigid three or six-month solutions without the option to settle up and move on when you’re ready for the next project. At Agility Finance, we provide versatile bridging finance options that don’t punish success by reducing ROI and stifling your ability to capitalize on new opportunities.

 

Gross Realisation Value: Profit and Loss Versus Assets and Liabilities

Here at Agility, we offer developer-specific finance solutions based on the end value of projects. We’ll consider the equity tied up in your development’s potential and look at your exit strategy so we can tailor a fit-for-purpose solution that allows you room to breathe and capitalize on successes. It makes construction finance more versatile and affordable.
When your site is appraised with a development mindset, well-planned, viable projects present fewer risks. That results in more periodic conditions during the build, such as inspections between construction phases and pre-sales requirements that hold things up.
We’re expert specialist construction financiers with a keen eye for development potential. When we assess a project, our real estate experts also allow us to be far less conservative regarding LVR. Agility Finance turns your gross realization value into cost savings by reducing delays and ensuring the funds you need are in place precisely when you need them.

Development Financiers Who Speak the Language of Developers

Agility designs tailored development and construction finance solutions based on your project’s specific challenges and advantages. Off-the-peg, standard bridging, and construction loan options are unsuitable and costly for developers. Our possibilities are provided explicitly with the construction or redevelopment process in mind. Because of that, approvals are faster, builds get out of the ground quicker, and our clients experience less downtime between projects.

  • We’re not simply a mortgage manager: We know the challenges you face, and we partner with you to bring added value to projects
  • GRV, not limited to LVR: Our clients access more versatile, exit-friendly development funding solutions with fewer restrictive terms and conditions
  • A smoother process: Our real estate expertise cuts the red tape to a minimum and means you can be on-site faster

 

Bridging finance is Designed for Construction and Property Development

Traditional construction finance can limit your options, sap profitability, and be challenging to secure. Developers need a broad range of more imaginative bridging finance solutions that leverage equity and lay the foundation for a smoother, more cost-effective development process.
Here at Agility, our clients utilize different bridging finance options in several ways for various purposes:

The ongoing costs of construction or property development: Cash flow is the last thing you need to be worrying about during a demanding project. At best, it can cause a temporary delay. At worst, a lack of free-flowing funds can bring a permanent halt to proceedings. Versatile, developer-specific construction finance solutions allow you to effortlessly access the funds you need at every stage of construction.

At Agility, we’re construction finance specialists. We look at every aspect of your build so we can identify viable projects and unlock future value. In many cases, looking at gross realization value allows us to offer a vastly improved LVR and fund a significant portion of land costs plus your entire construction costs.
Using a DA to start construction: even when you’ve gone to the trouble of obtaining a DA on a recently acquired block of land, it’s unlikely a traditional lender will consider development potential as collateral. At Agility finance, we appraise your project based on more than just existing bricks and mortar.

Our expertise allows us to consider the value a newly acquired DA represents, meaning you get the funding you need to start building work. You borrowed to buy a block for $800,000, and it’s worth $1.2M with a DA. We can arrange to advance the difference, and you can get the works underway immediately.

You can use the equity in your home or business premises to fund development: You can use residential or commercial property to support a product or construction project with a bridging loan. Whether you’ve outgrown your current office and want to build a new one, need a more extensive manufacturing facility, or identified a lucrative property development opportunity, we can consider the equity in your existing home business premises.

Unlock residual stock value to fund a new project: Traditional lenders can cause many delays when moving between tasks. Here at Agility, we believe good construction finance should make your build go more smoothly and facilitate a clean exit. We can add value to your operation by allowing you to use the value of your completed development to get a new one off the ground.

Many of our clients reach the end of development with a certain amount of surplus stock. You’ve sold limited apartments because of pre-sales requirements and only a few during construction. Now the bank is demanding you settle construction finance on time. Without specialist bridging finance options, you may need to reduce the price of apartments or face tremendous problems. Either way, you’re unlikely to acquire the funds to get that next project started before you sell – and that will probably mean compromising ROI on your existing build.
In addition, some projects can drop a significant slice of their profit due to ineffective, inflexible lending. For instance, if you’ve built high-end houses or apartments, you’ll likely achieve better prices and attract more buyers when people can see and touch the finish quality rather than selling off-the-plan. With fewer requirements for pre-sales and less pressure to sell stock at the end of a project, you can maximize ROI.

At Agility Finance, we provide seamless solutions that allow you to use the equity in completed projects to fund a new one. Not only that, but because we can often offer a significantly higher LVR, it makes that equity go further elsewhere and gives you more time to get a reasonable price for what you’ve already worked hard to build.

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