Revolving Credit Facility for Short-Term Property Finance

Revolving credit facilities can be secured or unsecured, the type you are offered is based on the amount of money you’ll be borrowing and the age of your business. At Signature Property Finance we offer our Revolving Credit Facilities on a secured basis, using one of your existing properties that doesn’t have any existing debt or financial obligations.

Unlike a typical bridging loan, which is secured against the property you're buying, this type of funding is based only on the property you already own. That means when you want to access the funds, we don’t need to assess the new property you're buying, only the one you already own.

All revolving credit in a line of credit but not all lines of credit are revolving. While this sounds complicated it’s simple to understand.

Revolving credit allows you to borrow, repay and borrow again without reapplying, examples are credit cards or a business revolving credit facility like our property hunter facility.

A non-revolving line of credit allows you to borrow an amount of money that you can use and repay, but you can’t borrow again without reapplying. An example of this would be a student loan or a bridging loan with a set limit of funds.

Unlike a typical residential bridging loan which is usually secured against the property you're buying - a Revolving Credit Facility is based only on the property you already own. These properties must be unencumbered (free of debt and owned outright) to be used for a credit facility, making it ideal for more experienced property developers and landlords.

Our Revolving Credit Facility usually lasts for 12 months, and you’ll only need a valuation of your existing properties, not the new ones you plan to buy. When you want to draw money from the facility, you just fill out a simple application, and the funds will be transferred to you within 24 to 48 hours.

Property developers often need quick and easy access to funds for activities like purchasing properties at auctions, refurbishments, or seizing time-sensitive opportunities. With this facility, they avoid the delays and complexities of new loan applications for each project while ensuring they have the resources required to complete their plans.

Yes, a revolving credit facility can be an effective solution for property auction finance. Its flexibility allows you to quickly access the necessary funds to secure a property at auction, where tight deadlines often apply.

With our Revolving Credit Facility, you can bid confidently knowing that you have pre-approved funding available. Once the property is acquired, you can repay and redraw the funds as required, enabling you to manage your cash flow more effectively while preparing for the next purchase. This makes it a popular choice among property professionals looking to take advantage of time-sensitive opportunities in the auction market.

Borrowers using our Revolving Credit Facility are charged an initial 2% arrangement fee and a fixed interest rate on drawn balances. This facility allows for rapid access to funds of up to £1,500,000. We don’t display our monthly interest rates online as we are constantly adapting to the current market and to each individual deal, but we guarantee you’ll only get the best deal available.

When considering financing options, it's essential to weigh the advantages and disadvantages to determine if they align with your specific needs and goals. A revolving credit facility comes with its own set of benefits and potential drawbacks, making it crucial to evaluate how this flexible funding solution fits into your overall strategy.

Pros

• Flexibility: Draw, repay, and reuse funds as your project requires.

• Speed: Access funds within 48 hours for quick property deals.

• Efficiency: Only pay interest on the amounts you use.

• Reduced Delays: Only initial collateral valuations are required, saving time for future drawdowns.

Cons

• Higher Costs: Fixed interest rates and arrangement fees may be higher than other property finance products.

• Short-Term Commitment: Most facilities are limited to 12 months, which may not suit long-term plans.

• Creditworthiness Required: You’ll need strong collateral and credit credibility.

To apply, you’ll need to provide details about your collateral properties and the intended use of the funds. The lender will assess your assets for suitability and may charge an arrangement fee upon approval. Once your application is approved, funds can be drawn down as needed, with the flexibility to repay and redraw throughout the term.

If you’d like to learn more about revolving credit facilities and how they can support your property development business, get in touch with Signature Property Finance today.