Fast Bridge to Development Finance

An experienced developer had identified a prime residential development site in south-east England. The site had a resolution to grant planning but the Section 106 agreement was still being negotiated — meaning formal planning permission hadn't been issued.

The landowner had received competing offers and gave our client a 4-week deadline to exchange. No development lender would fund a site without planning permission, and the client didn't have £6.4m of cash to acquire outright.

The timing was the main challenge. Development finance requires granted planning — no lender will release funds against a resolution to grant. But the site would be lost if the client waited for planning to be formally issued.

We needed a two-stage structure: a bridging loan to acquire the site immediately, followed by a development finance facility once planning was confirmed. The bridge needed to be fast (4 weeks), and the development finance needed to be pre-agreed in principle to give the bridge lender confidence in their exit.

We ran both workstreams in parallel, producing a comprehensive development appraisal and strategy document that underpinned both the bridge and the development finance applications. We secured a bridging facility of £6.4m with a specialist bridge lender who was comfortable with the planning risk — based on the resolution to grant and the strength of the developer's track record. The quality of our presentation gave the bridge lender confidence in both the deal and the exit.

Simultaneously, we agreed Heads of Terms with a development lender for £18.2m, conditional on planning being formally granted. The bridge lender was satisfied that the development finance represented a clear exit route.

The bridge completed in 3 weeks. Planning was formally issued 5 months later. The development finance facility replaced the bridge seamlessly — the developer didn't need to find any additional equity for the transition.

Site secured within the vendor's deadline. Bridge of £6.4m drawn, then refinanced into £18.2m development finance on planning confirmation. The 42-unit residential scheme is now under construction, on programme and within budget.

Without the two-stage structure, the developer would have lost the site to a competing bidder — and the £3m+ profit opportunity that came with it.