Novellus operates in the UK and Ireland, offering alternative funding solutions to those of the mainstream banks, secured primarily by real estate. For property developers, the ability to move quickly is often the difference between securing a profitable opportunity and watching it pass to a better-funded competitor. In today’s market, speed of execution is not a luxury, it is a necessity.
This is where bridging finance plays a critical role.
The Problem with Traditional Development Finance Timelines
Mainstream lenders, high street banks and institutional funders, operate within rigid frameworks. Credit committees, extended underwriting processes, valuation panels and lengthy legal requirements all contribute to timelines that can stretch to several months from initial enquiry to drawdown.
For developers who have just agreed to purchase a site, secured a planning consent, or identified a time sensitive refurbishment opportunity, waiting several months to receive funds for the transaction is often too long. Vendors lose patience, planning conditions may lapse and competing buyers with committed funding may emerge.
Traditional finance was built for predictability, not speed. Bridging finance was built for exactly the opposite. See a previously written blog by Adam Forman (Head of UK Bridging) explaining the importance of quick lending in the property market here.
What Is Bridging Finance and How Does It Work?
Bridging finance is a short-term lending facility, typically ranging from 1 month to 24 months, secured against property or land. It is designed to be deployed quickly, providing capital at the point it is needed most, and repaid once a longer-term solution is in place or the asset is sold.
At Novellus, we lend our own capital. That means no external credit committees, no institutional funding chains, and no delays caused by third-party approval processes. Our team can assess an opportunity, issue terms and progress to drawdown far faster than a mainstream lender – often within a few weeks rather than months.
This privately funded model, with no external credit committee, is one of the most important structural advantages we offer developers who need certainty, fast.
How Bridging Finance Accelerates Key Stages of Development
Site Acquisition
Acquiring a site is frequently the most time critical moment in any development. Landowners prefer buyers who can demonstrate that funding is in place and this significantly strengthens a developer’s negotiating position.
Bridging finance allows developers to complete on site acquisitions at a pace that aligns with vendor expectations, without waiting for a full development finance facility to be structured. Once the site is secured and planning is progressed, a longer-term development facility can be arranged.
Planning and Pre-Enabling Works
Planning applications take time. During that period, developers need to fund professional fees, surveys, pre-application engagement with local authorities and potentially some enabling works. Mainstream lenders are rarely willing to fund a site at this stage as the risk profile, in their view, is too high.
Bridging finance fills this gap. Novellus can lend against a site (subject to leverage criteria) either in advance of or during the planning process, providing the capital needed to progress the application and unlock future value. A successful planning outcome, whether full planning permission or permitted development rights, can transform both the value of the asset and the developer’s ability to access finance at the next stage.
Ground Up Development and Staged Drawdowns
For ground up development schemes, the funding requirement evolves through every stage of the build, from groundworks and substructure through to first fix, second fix and practical completion. Bridging and development finance facilities at Novellus can be structured with staged drawdowns, releasing capital in line with build progress and monitored valuations.
This approach manages cashflow for developers while ensuring the lender has appropriate visibility of progress. It also means developers are not carrying the cost of full capital from day one, which can materially improve the economics of a scheme.
Heavy Refurbishment and Conversion
Properties requiring significant structural works, reconfiguration or change of use present a financing challenge for mainstream lenders, who typically decline to lend until a property is in habitable condition and income generating. For developers who specialise in adding value through refurbishment, this creates a persistent funding gap.
Bridging finance “bridges” that gap. Novellus can lend against the current value of a property with a clear view to the enhanced value on completion, providing the capital needed to carry out works that mainstream lenders will not fund at entry.
The Importance of a Clear Exit Strategy
Every well-structured bridging facility is built around a credible exit. For development projects, the most common exits include:
- Sale of completed units i.e. residential or commercial properties sold on completion of the development or refurbishment.
- Refinance onto a buy-to-let or commercial mortgage, where the completed and stabilised asset generates income and qualifies for longer-term lending.
- Development finance, where the bridging facility at acquisition is replaced by a structured development loan once planning is in place.
- Sale of the site with planning, realising a planning gain without proceeding to build.
Novellus assess exit strategy as a central part of every credit decision. A strong exit, realistic, evidenced and well-planned, is the foundation of a successful application. See the following case study detailing how Novellus provided a development exit facility to a borrower, secured against a Grade II listed property in London.
Why Developers Choose Novellus
At Novellus, we understand that every development opportunity is different. We don’t apply a rigid template to every deal. Instead, we take the time to understand the asset, the borrower’s track record, the project plan and the exit ‚ and structure a facility accordingly.
Our key differentiators are:
Speed. Because we lend our own capital, our decision-making process is streamlined. We can move from initial enquiry to credit approval in a fraction of the time a mainstream lender would require.
Flexibility. We can consider complex structures, unusual assets and situations that fall outside the appetite of institutional lenders. If the deal makes financial sense, we have the flexibility to find a way to support it.
Certainty. Developers need to know their funding will complete. With Novellus, there is no third-party funding chain to cause delays or reversals. When we commit, we deliver.
Experience. Our team has deep experience in property finance across the UK and Ireland. We understand the pressures developers face and structure our facilities to support, not complicate, the development process.
Funding starts from £250,000 with no upper limit, and rates from 0.8% pcm.
A Note on Working with Brokers and Introducers
Many of the developers who work with Novellus come through our network of experienced brokers and introducers. If you are working with a broker, they can engage with our team directly to explore terms quickly and informally before a formal application is submitted. We value these relationships and work to ensure our turnaround times support the pace at which good brokers work.
To find out more about our introducer programme, visit: https://novellusfinance.com/uk/introducers-partners/
Get in Touch
If you have a development opportunity that requires fast, flexible funding, we would be delighted to hear from you. Our team is available to discuss your project informally and provide an initial view on whether Novellus can help.
0203 397 4871
https://novellusfinance.com/uk/contact/
