A £700,000 stepped rate bridging loan helps a Nottinghamshire developer recycle equity into their next project
Funding 365 has completed a 75% loan-to-value (LTV) stepped rate bridging loan at a starting rate of 0.49% per month, enabling a residential developer to refinance a newly completed five-bedroom house in Nottinghamshire and free up capital for their next scheme.
The London-based specialist bridging lender, which was established in 2013, provides unregulated, first charge short-term loans for landlords and developers secured against residential, semi-commercial and commercial properties across England, Wales and Northern Ireland. Its product range spans bridging, development finance and specialist buy-to-let lending.
The £700,000 facility was structured under Funding 365's Stepped Rate Bridge product – a short-term lending solution designed to reward borrowers who can exit ahead of schedule. The loan is set at 0.49% per month for the first six months before stepping up to 1.15% per month from month seven. An exit fee of 1.15% applies alongside a standard 2% arrangement fee, with legal and valuation costs charged at market rate.
In keeping with all of Funding 365's bridging products, the facility carries no admin fees and no early redemption charges, subject to a minimum three-month term. Interest is rebated on a daily basis for any loan repaid ahead of its scheduled end date.
Why stepped rate bridging appeals at the end of a development
The transaction reflects a pattern brokers will recognise increasingly in 2026. Development exit finance has emerged as a strategic tool for developers who need to avoid distressed sales, hold completed stock at the right price, and recycle equity into new acquisitions. For developers with a near-certain sale in sight, a stepped rate structure offers a meaningful cost advantage over a standard flat-rate bridge – provided they can exit within the initial lower-rate window.
In this case, the security is the final remaining unit in a multi-plot development in Nottinghamshire, and the borrower has an active purchase offer in place.
Prim Kambhato (pictured top), underwriter at Funding 365, explained the appeal for developers at this stage of the sales process: "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."
Transparency as a differentiator for commercial brokers
For brokers placing commercial bridging cases, fee transparency has become an increasingly important factor in lender selection. The most significant shift in 2026 underwriting is that lenders now require evidence-based exit planning, with borrowers expected to present comparable sales data, confirmed rental income projections, or mortgage-in-principle agreements rather than a stated intention to repay. A clean fee structure and daily-rebated interest reduce the risk of cost surprises when a borrower exits ahead of schedule.
Funding 365's approach centres on a principal-led funding model, with mandated underwriters authorised to deliver bespoke bridging terms within one hour of receiving full case details, and the same underwriter managing the loan through to completion.
The Stepped Rate Bridge product starts from 0.39% per month on eligible cases. For brokers active in the development finance space, the ability to present a lender with a transparent, no-hidden-fee structure – and a rate that rewards an early exit – is increasingly a strong point of difference in a market where developers are under pressure to recycle capital quickly and move on to their next scheme.
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