Not every property deal should be funded the same way.
Most sourcers reach for one of two routes: a buy-to-let mortgage or a bridge. But the right answer is often neither, and presenting a deal on the wrong route is one of the quickest ways to see it stall. The right finance route depends on the asset, its condition, the client profile, the timeline and the end goal. Two sourcers can bring the same building to us and need completely different funding, because their clients, their timelines and their exits are different.
Understanding the likely route early is one of the most useful things a sourcer can do. It helps you qualify opportunities more effectively and present deals with greater confidence. Here are the routes worth knowing, grouped by the job they do.
Long-term routes: holding a finished property
Buy-to-let mortgages for standard rental investment properties. The default route for a lettable property in mortgageable condition, held for income.
Portfolio finance for landlords holding multiple properties, where the lending is structured across the portfolio rather than property by property.
Commercial and semi-commercial mortgages for mixed-use or commercial assets, where the lending criteria differ significantly from residential and often depend on tenant, lease and trading performance.
Short-term routes: transition, works and speed
Bridging finance for time-sensitive purchases, auction purchases, or properties that need speed. Short-term, fast, and priced accordingly, with the exit doing the heavy lifting.
Bridge-to-let where a client needs short-term funding to acquire or refurbish, before moving onto a longer-term buy-to-let mortgage once the property is ready.
Refurbishment finance for properties requiring works before they can be refinanced or resold. The route for deals that aren't mortgageable in their current condition. Lighter cosmetic works often sit within a bridging facility; heavier structural or conversion works move into development lending.
Development finance for heavier works, conversions or ground-up projects, released in stages against the build. Lenders assess planning, build costs, the professional team and borrower experience, and funds are usually released in arrears as work completes, which is a cash-flow point worth planning for.
Development exit finance for when a project is practically complete but the developer needs more time. The typical case: a scheme built out on a development loan with a few units left to sell. A short-term facility repays the original loan and buys time to sell or refinance the remainder.
Part-complete finance for sites that are unfinished, often wind and watertight but stalled. These can be bought cheaply because they carry little value in a half-finished state, and finishing the works can create a significant uplift. Usually the territory of investors with a contractor team.
--------------------------------------------------------------------------
For sourcers, the value isn't in knowing the mechanics of every product. It's in recognising early which direction a deal is likely to go, so you can qualify it properly and set your client's expectations from the start.
A deal that needs bridging and a refurb runs on a different timeline and a different cost base than a straightforward buy-to-let, and knowing that at the point of sourcing changes how you present it.
"Bridging is not simply a faster version of a mortgage. It's a different type of finance, with a shorter term, a different cost structure and a specific repayment event." — Alastair Hoyne, Founder, Finanze Property
Finanze Property works with landlords, investors, developers, business owners and intermediaries to structure finance around the objective, timing and exit strategy, not just the transaction. Several of the specialist routes above, including bridging, refurbishment, title split and lease extension finance, are also offered directly through our lending division, Finanze Capital.
Not sure which route a deal needs?
That's what we're here for. Send a deal through the NAPSA partner page and we'll come back with a view on the likely route and what would need to be true to make it work. You can also read more about Finanze Property and the funding we arrange.
Finanze Property is a trading style of Finanze Ltd, authorised and regulated by the Financial Conduct Authority under reference 990498. Your property may be repossessed if you do not keep up repayments on your mortgage. Finanze are a credit broker, not a lender. Not all forms of business buy-to-let and commercial lending are regulated by the FCA. NAPSA does not provide financial advice and is not responsible for the services provided by Finanze Property.
