How Are Bridging Loan and Redevelopment Finance Different and what’s Asset Refinancing?

Bridging loans for property development and redevelopment finance have a number of similarities. These options are only ideal for short-term funding and both can be invested in finance building new properties or refurbishing run-down dilapidated ones.

On completion of the project, the bridging loan or development finance amount is to be returned. To achieve this, most people refinance the property with a long-term finance option like a commercial mortgage or sell the property.

You can take development finance for periods up to 36 months, while usually bridging loans are up to 12 months. To buy a new property or refurbish, property development finance is a great option because it might be cheaper and have better rates. Plus, the proceeds of the loan are released whenever required as the work progresses, allowing further savings on the interest charges.

The development finance provider relies heavily on previous development experience, so if this isn’t available then a bridging loan from commercial real estate bridge loan lenders is the best and only option for you.

As far as asset refinancing is concerned, it’s a form of finance used by businesses to let go of some equities in an asset like a vehicle, a piece of machinery, or some other equipment. Asset refinancing usually takes place for assets owned outright, though refinancing can also happen when there is already one finance facility secured on the asset, provided the existing facility is repaid by the money from a new facility.