Refinancing
Bridging Refinance and Development Refinance are short-term finance facilities that enable you to finish your project, sell an asset, or arrange long-term finance.
A refinance of a bridging loan or development finance gives you a new facility to repay your existing one. This new loan gives you the benefit of the following:
- achieving better terms (known as Term refinancing)
- unlocking additional finance (known as Cash-out refinancing)
- locking in a better rate (known as Rate refinancing)
- remove concerns about missing your exit strategy
- remove conflict or concern of repossession.
Refinance your Bridging Loan or Development Finance when you're not ready to exit, want better terms, or need to cash out equity.
Our Bridging and Development Refinancing Service
We know the opportunities that bridging and development finance solves and the challenges those who use it face. Whether you're refinancing to maximise your loan amount, achieve better terms, lock in better rates, seize another opportunity, or because your original exit looks set to be delayed or even fail, we can refinance your loan.
We can arrange refinancing for loans from £26,000 to £250,000,000.
Speak with our experts for the latest rates for refinancing.
Get your best no-obligation quote today - we're ready to help.
Our Refinance Products
Bridging loan refinance
Bridging loan refinancing, or re-bridging, replaces your existing facility secured by either a first or second charge on one or more of your properties. It's quick to arrange, typically taking two weeks, and available for terms between 1 and 24 months.
Property Development Refinance
Property development refinancing is a short-term loan used to repay a finance facility for building construction, conversion and renovation. It comes in various structures, such as debt, equity or a combination. The most common structures for Development refinance are debt-based loans, such as:
- Senior loan/debt, also known as a 1st charge.
Typically covering up to 100% of construction costs and part of the site purchase costs up to 65% of GDV. - Mezzanine loan/debt, Junior debt, 2nd charge or Subordinate Debt.
Typically, a smaller loan than the senior loan leverages the remaining equity to release capital for the same or different development project. - Other refinance options include Stretched Senior Debt, 100% structured finance, Preferred Equity and Joint Venture.
Development exit finance
Development exit finance is one type of development financing designed to help developers reach the end of development. Development Exit Finance, or developer exit loans, allows a developer to refinance after the main construction phase is either completed or nearing completion.
Refinancing at this stage of the development typically achieves a better rate because the risk of the development has now been reduced. Development Exit Finance has product variations, such as Finishing and Exit Loans or Sales Period Finance. Both achieve a similar goal just at a project's very later stages.
Speak with a refinancing expert
We have an extensive network of specialist UK bridging and development lenders, including private investors, family offices and private equity firms, meaning we can secure you the best rates and terms for your refinance.
Our experts understand your challenges and will position your requirements in a way our lending panel understands and can lend against.
Get expert assistance today. We'll answer any questions about your bridging and development financing.
Call our friendly team on 01202 612934, we're ready to help.
Bridging Refinance Lending Criteria
| Loan to value (LTV) | Up to 75% maximum Up to 100% with additional assets in the background |
| Loan term | 1 to 24 months |
| Loan amount | £26,000 up to £250m |
| Interest options | Rolled-up, retained or serviced |
| Interest rates | From 0.44% |
| Decision | Immediate decision in principle |
| Completion | 2 weeks |
| Early repayment fees | None |
| Availability | Secured on assets in UK & Europe Individuals, Companies, SPVs No credit & adverse credit considered |
| Exit strategy | Sale or refinance |
Development Refinance Lending Criteria
| Loan to gross development value (LTGDV) | 65% maximum (100% with additional security) And 100% Build financing |
| Loan to Cost (LTC) | 90% maximum (100% with additional security) |
| Loan to Value (LTV) | 65% LTV of the purchase price (100% with additional security) |
| Loan term | 3 to 24 months |
| Loan amount | £200,000 up to £250m |
| Interest options | Rolled-up, retained or serviced |
| Interest rates | From 0.44% |
| Decision | Immediate decision in principle |
| Completion | From 3 days to 3 months (Depending on the type of finance required - please call for more info) |
| Early repayment fees | None |
| Availability | England, Scotland, Wales and Northern Ireland & in some cases parts of Europe Individuals, Companies, SPVs No credit & adverse credit considered |
| Exit strategy | Sale or refinance |
What is refinancing?
Refinancing, also known as "refi", is repaying an existing debt with a new loan agreement. The refinance facility is provided by either the same or a new lender.
The loan agreement between the borrower and the lender is a formal contract outlining counterparty information, responsibilities and credit terms, and refinancing typically occurs when the borrower wishes to change the credit terms. The credit terms consist of the loan amount, interest (fixed or variable), repayment schedule and covenants.
Refinancing is a broad term used to describe one debt repayment with another. Several common types of refinancing include mortgage, secured loan, and personal loan refinancing.
5 Benefits of Refinancing
The five scenarios advantageous to a borrower changing credit terms and refinancing are:
1. Term Refinancing
Term refinancing is when a borrower requires additional time to repay the sum borrowed beyond the duration of the original loan or a different repayment schedule. For example, changing the number of months of repayment or changing the type of repayment method from interest only to capital and interest, or vice versa.
2. Cash-out Refinancing
Cash-out refinancing is when a borrower refinances to raise more finance than the original loan amount. For example, getting a loan for a larger amount would facilitate having money left over after paying off the original loan.
3. Rate Refinancing
Rate refinancing is when a borrower refinances at a lower interest rate by switching products or lenders to make the overall cost of the loan cheaper or to change the risk of the interest charges by switching from a variable rate to a fixed-rate loan.
4. Cash-in Refinancing
Cash-in refinancing is when a borrower refinances their loan while reducing the loan amount by putting more cash to cover the difference. The key benefit to the borrower will be a reduction in total interest costs and/or to achieve better terms on the finance.
5. Debt consolidation
Debt consolidation is when the borrower with multiple debts wishes to consolidate all existing loans into a single loan. The benefit of debt consolidation is that the borrower will achieve a better overall loan rate, term or where it simplifies managing the repayments.
Can a lender force me to refinance?
Yes. In specific circumstances, lenders can force borrowers to repay debt obligations.
This occurs when a borrower has breached a loan covenant of their agreement, which then permits the lender to demand repayment before the loan maturity date. This is typically stipulated in the "Acceleration clause" within the contract, allowing the lender to accelerate the repayment schedule under specific circumstances. Should the borrower not repay the debt with cash, the borrower will either need to refinance the loan with another lender or default on the loan.
What types of loans can you refinance?
Any loan that provisions for early repayment within its terms can be refinanced.
There are several types of common loans that you can refinance. These include:
Mortgages, such as:
- Bridging finance loans
- Homeowner (HELOC) loans
- Buy-to-let mortgages
- Commercial mortgages
- Land loans
- Second-charge loans
- Secured finance
- Property development finance
Commercial finance, such as:
- Small business loans
- Invoice finance
- Asset finance
Vehicle loans, such as:
- Personal contract purchase (PCP) finance
Personal loans, such as:
- Credit card debt
- Bank overdrafts
How do you refinance?
The process of refinancing requires six key steps:
Step 1: Review your loan agreement
You probably already know the terms of your existing loan, but be sure to check your loan terms carefully and identify any conditions that may stop you from repaying your loan before its maturity. Identify any early repayment charges you may incur to make sure any savings from refinancing make financial sense.
Step 2: Source alternative finance options
Source alternative financial products that will better meet your financing requirements, be they from the same lender, a different lender, or a broker who can source quotes from multiple lenders on your behalf. Be clear about your needs when speaking with your broker or lender, explaining your situation, existing loan credit terms and the reason for your refinance.
Step 3: Obtain the early settlement figure from your lender.
Contact your current lender and ask them to tell you the total amount you must pay to clear the loan in full. This is called an 'early settlement figure'.
Step 4: Get a formal Agreement in Principle (AiP)
Also known as "Decision in Principle" or "Offer", the AiP will detail the new lender's criteria, terms and costs of the refinance you are considering.
Step 5: Choose the refinance that best suits your needs.
Before signing a new contractual loan agreement, ensure that the loan meets all your requirements, including the completion timescale if your loan is time-sensitive.
It's recommended that you seek professional advice from an independent financial advisor to help you make sound financial decisions and a solicitor to review the contract before entering any new contractual agreement.
Step 4: Proceed with refinancing
Sign the new contractual loan agreement, complete the loan arrangement and draw the funds. Typically, the early settlement figure owed to your existing lender, or lenders where you're paying off multiple debts, will be repaid before you receive any surplus funds.
Refinancing Bridging Loans
Bridging loan refinancing replaces an existing finance facility secured as a 1st or subordinate charge, such as a 2nd charge against one or more properties.
Can I Refinance a Bridging Loan?
Yes, you can refinance a Bridging Loan; in most cases, there are no restrictions.
Restrictions on refinancing Bridging Loans
Bridging loans are a short-term financial product, so the lender expects you to require it as a temporary solution for finance. For this reason, there are typically no early repayment charges (EPCs) when a borrower exits the loan, whether before the loan matures. To check whether your loan has any ERCs, review the repayment schedule conditions in your bridging finance agreement.
Reasons to Refinance a Bridging Loan
The three main reasons to refinance a bridging loan are:
- get better terms (known as Term refinancing)
- get more money (known as Cash-out refinancing)
- get a better or less risky rate (known as Rate refinancing)
When should I refinance a Bridging Loan?
You should consider refinancing your bridging loan when it makes financial sense. For example, if you require more finance than your original loan amount and the cost-benefit ratio is favorable, then refinancing may be advantageous.
Refinancing rates for Bridging Loans
Rates for refinancing a bridging loan are the same as taking the original, provided your circumstances haven't deteriorated. For example, you'd unlikely be penalised for taking a larger bridging loan to repay an existing one where everything else remains equal. However, to ensure the loan-to-value ratio remains equal, you'd need to increase the equity at the same rate as the increased loan amount. This could be achieved by an uplift in the asset's market value or by adding more assets as security.
An example of why rates would likely increase when refinancing a bridging loan would be if the borrower missed the original repayment term or required a larger loan without offering additional collateral to mitigate the rise in LTV.
How long does it take to refinance a bridging loan?
It takes two weeks to refinance a bridging loan in the quickest instance. While refinancing is similar to obtaining a new bridging loan that can be completed in 3 days, additional time is required to liaise with your existing lender.
Final thoughts on refinance
Refinancing is a strategic financial decision, and it offers real advantages for those nearing the end of their Development Finance or Bridging Loan terms but still requiring time to complete projects, sell assets, or secure long-term finance.
Our refinancing services cater to various needs, from seeking better terms and unlocking additional finance to securing more favourable rates. With the option to refinance loans from £26,000 to £250,000,000, we provide a solution for diverse financial scenarios. Whether it's re-bridging a loan, refinancing property development, or exploring development exit finance, our team of experts is ready to secure the most competitive rates.
Get in touch with the refinancing specialists
Get expert assistance today, we're on hand to answer any questions about your bridging and development refinance.
Call our friendly team on 01202 612934, we're ready to help.
