Bridging Loans for Land
Land bridging loans are designed to provide short-term finance for land purchases.
They are ideal for times when raising traditional capital will take too much time or to help finance a planning application to develop the land.
With viable land being in short supply, speed is key when opportunity arises. Standard financing can take months to arrange, which can be far too long for certain situations.
A land bridging loan is the answer.
You can use a land bridging loan for:
- Purchasing land at auction
- To complete the purchase of land quickly or while raising standard finance
- To fund a planning application
- To enable you to secure land for a range of commercial or residential developments
- To refinance an existing loan secured on land for any reason
Key features of a Land Bridging Loan
A land bridging loan is short term finance to help secure land quickly for almost any reason. They are typically used to buy land at auction or to secure a deal when speed is a condition of sale.
A land bridging loan can also be used to help finance planning permission for land to be developed and before traditional finance becomes available.
A typical minimum land bridging loan would be around £50,000 with no upper limit.
Bridging loans are regarded as high risk, so can come with significant acceptance criteria.
You can typically borrow up to 70% of the land value (LTV) for periods of up to 3 years and interest is charged monthly.
Can I get a Bridging Loan for land?
Yes, you can get a bridging loan for land. A land bridge loan is a short-term loan that is used to purchase land without planning permission or with an uncertain exit strategy.
It provides the borrower with the funds they need to secure the land until they can arrange longer-term financing such as a mortgage or other suitable funding.
The lender will assess your application based on factors such as the loan to value, your credit score and history, and your proposed exit strategy.
If approved, you will be able to use the funds to purchase the land without planning permission and complete any necessary repairs or improvements.
In some cases, lenders may not require you to have an exit strategy in place before approving the loan for land; however, it is always useful to have a plan for how you will repay the loan once it matures.
Why use Bridging Finance for land purchases?
Using bridging finance for land purchases is a great way to make sure that you have the funds necessary to complete the purchase.
Bridging finance provides short-term financing for those who need it quickly and are unable to wait for more traditional forms of financing.
This type of finance can be used to cover the gap between a buyer’s available funds and the required amount of money needed to purchase land.
It can also be used if there are delays in obtaining a mortgage or other types of loan financing.
By using bridging finance, buyers can avoid missing out on a great opportunity due to a lack of funds or long waiting times.
In addition, the cost of this type of loan is typically lower than other forms of loans, making it an attractive option for those looking to purchase land and as such, using bridging finance for land purchases is a smart move that can help you secure your dream property quickly and affordably.
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How much can you borrow for Bridging Loan on land?
A bridging loan on land, also known as a land bridge loan, is typically used when the borrower needs to purchase residential property or obtain planning permission for development purposes but does not have the necessary funds available.
The amount that can be borrowed through a land bridging loan will depend on the lender and can vary significantly.
Generally speaking, the lender will consider factors such as the value of the property or land being purchased, the borrower’s financial situation, and any existing debts they have.
If everything checks out and meets their criteria, they may approve a loan up to 70-75% of the value of the property or land.
However, it is worth noting that this may be subject to change depending on your specific circumstances.
Is there anything else I should know about land Bridging Finance?
Land bridging finance is usually an option for borrowers who need to access fast cash to purchase land quickly and don’t want to wait for the lengthy mortgage process.
A lender provides this kind of bridging loan, which usually must be paid back within 12 months or less.
Having an exit strategy in mind before taking out a land bridge loan is also important, as it will determine how you will repay the loan when it comes due.
It’s always wise to understand all terms and conditions associated with any loan, but especially with land bridging finance as it can be expensive if not carefully managed.
Knowing your credit score and financial history can also help you get the best deal from your lender.
Why choose GPS Financial
GPS Financial can help you set up a land bridge with the right bridging loan.
Bridging finance is a great way to purchase land quickly, as it allows you to obtain a loan before your existing property is sold, meaning that you don’t have to wait for the sale of an existing property before buying the land.
GPS Finanacial are award winning property finanace specialists, taking home the award in 2022 for Best Firm: Bridging & Commercial, selected by Dynamo for Intermediaries, one of the countries foremost Mortgage Clubs.
GPS Financial have an experienced team of professional brokers, with many years of collective knowledge and access to the top loan providers guaranteeing you get the highest quality service and maximum value for your money.
If you’re considering a land bridging loan, contact GPS Financial today, fill in the contact form at the top of the page and one of our financial advisors will get back to you.