Funding 365 has completed a £700,000 stepped-rate bridging loan at 75% LTV, helping a developer refinance a newly built property and release capital for their next project.
The facility was secured against a newly constructed five-bedroom house in Nottinghamshire and was structured to provide maximum flexibility while the borrower progresses a sale.
The loan carries an initial rate of 0.49% per month, increasing to 1.15% from month seven onwards. The deal also includes a 1.15% exit fee, a standard 2% arrangement fee and market-rate legal and valuation costs.
The transaction highlights growing demand for stepped-rate products, which reward borrowers who can achieve an earlier-than-expected exit while still benefiting from the security of a longer-term facility.
CASHFLOW AND RECYCLED CAPITAL
With developers increasingly focused on managing cashflow and recycling capital into new schemes, such products are becoming an attractive alternative to traditional bridging structures.
Funding 365 says its stepped-rate proposition includes no administration fees or early redemption charges, subject to a minimum three-month term, with interest rebated daily where loans are repaid ahead of schedule.
The lender says the structure is proving particularly popular with developers approaching the final stages of a project and awaiting disposal of remaining units.
As developers continue to face planning delays, build cost pressures and slower sales cycles, flexible short-term finance structures are becoming an increasingly important tool for maintaining liquidity and supporting ongoing pipeline activity.
POPULAR PRODUCT
Prim Kambhato (main picture), Underwriter at Funding 365, says: “Our Stepped Rate Bridge product is particularly popular with developers nearing the end of their sales process.
“While it still provides the reassurance of a full 12-month term, borrowers benefit from a lower rate if they are able to exit sooner.
“In this case, our security is the last remaining unit in a multi-plot development and our borrower already has a purchase offer, so they are confident of an early redemption.”
