Hodge has launched two bridging loans aimed at experienced small business developers and brokers who specialise in development finance.
The bank says its Acquisition Bridge offer is a short-term finance product for developments with, or without detailed, or proposed use planning consent, where a change of planning permission, or use is required, or for agreed developments that are not due to start for six months.
It says the loan can “help developers move quickly to buy land or property, affording the borrower time to improve or perfect their planning consent or change of use”.
Its Acquisition Bridge product is available to experienced residential property developers, including partnerships, LLPs and limited companies. Loans range from £250,000 to £5m, with the loan-to-value ratio depending on the asset and planning permissions in place, with terms ranging from six to 24 months.
The lender adds that following this loan can provide longer-term development finance for the next stage of the project.
The bank’s second product is the Sales Bridge, another short-term finance product available for developers as they come to the end of a project, allowing them to release equity from the development in order to secure a new development site opportunity, return equity to investors early, or free up funds while asset sales are progressing.
The Sales Bridge product is only available to the firm’s existing development finance customers, with a loan amount also ranging between £250,000 to £5m. The maximum LTV is 75% of gross development value with a term of up to 12 months.
Hodge head of development finance Gareth Davies says: “We understand that development finance needs flexibility. Sometimes there are opportunities that developers want to jump on quickly or that situations may arise that the developer wasn’t expecting and so we’ve created these new options to help our clients and brokers bridge those gaps.
“The Acquisition Bridge product will allow developers and brokers to access funds more quickly than traditional development finance and in situations where planning consent may not yet have been achieved, with the potential to convert to a Hodge development finance facility in due course.
“The Sales Bridge product will help our existing developer customers access increased term and additional leverage, upon practical completion, should it be required. Affording increased flexibility and greater options at a time when equity can be tied up in completed units.”
