Interim Finance: Definition, Applications and Costs

When is interim financed?

• Purchase before sale: the new property is due, the proceeds of the old property have not yet flowed – the most common case.
• Pre-financing of long-term financing: the final financing is promised, but subject to conditions (land register, declaration of division, construction progress).
• Project phases: Land, planning or start of construction must be paid before Property development finance or MaBV rates.
• Due equity: An inheritance, fund distribution or business sale: the capital inflow is expected, but will arrive at a later date.

Structure, collateral, costs

interim finance are terminal Maturity financing: current interest only, repayment in a sum from the inflow. Secured on a regular basis by a Land charge against the existing property or the property being acquired. Interest rates exceed long-term lending rates, reflecting the speed, short duration and exit risk. Lenders focus on the expected repayment: how certain is the inflow, and when will it arrive?

Delimitation and professional practice

In terms of content, the interim finance is the generic term, Bridge finance and Bridge loan are commonly used terms, with bridge finance prevailing in the institutional market. For professional clients, we structure interim finance from €750,000 to €180 million, from time-sensitive acquisitions to advances against sales proceeds. Start with the Power side bridge finance or directly by Initial assessment.