One of the most common discussions that I have with property investors (aside from how to value a HMO!) is about using development finance, so I'm going to give an outline of the various scenarios that require this type of finance, including the best uses, risks and likely costs.

In essence there are two types of finance for refurbishments, developments, new builds etc.:-
1. Bridging
2. Development Finance

Bridging
On the whole bridging is faster but more expensive and development finance takes longer but can be a lot cheaper. Each has its place.

Bridging lenders are used to working at speed; if you have a deadline to meet then always go for bridging finance.

Lenders will often try to outdo each other by quoting completions in days or even hours! 7-10 days is usually sufficient and comfortable for all parties and easily achievable with a decent bridging lender.

They don't tend to require a lot of information and paperwork is often minimal. Poor credit history is also usually acceptable however I'd advise some caution if your exit is going to be refinancing.