Quick Summary

Location: High-end residential development site (location withheld for privacy)
Loan Type: Second Mortgage
Loan Amount: $1.4 million
Problem: Construction delays and cost overruns due to prior mismanagement
Solution: Fast, non-bank second mortgage funding to complete the build

The developer was facing the risk of unfinished prestige homes and a growing financial shortfall. What started as a luxury residential development had stalled due to defects, overspending, and poor oversight from the original builder. Work came to a stop, funds ran out, and traditional lenders withdrew. With a half-finished project and waning investor confidence, the future looked uncertain.

They needed funding urgently. But not just any funding. They needed a lender who understood the complexities of construction finance at the final stage of a build, and one who could act quickly.

When traditional finance won’t step in

Most banks won’t support developments in distress, particularly when a builder has abandoned the project. This developer had already tried mainstream banks and second-tier lenders. Every answer was the same: “Too risky.”

The problem was the stage of the build. While the structure was standing, it wasn’t fit for completion without an injection of funds for finishing trades, compliance approvals, and defect rectification. Each day the site sat idle, increasing costs, interest charges, and delays to settlement.

The developer wasn’t just short on time; they were short on options.

A strategic second mortgage secured in days

This is where Bridging Loans stepped in. We assessed the development, reviewed the loan term remaining, and evaluated the developer’s equity position. We saw strong underlying value in the property, despite the setbacks, and a borrower motivated to finish.

Within days, we provided a $1.4 million second mortgage loan secured against the equity in the site.

Here’s how we made it work:

• Loan Type: Second mortgage, sitting behind the first mortgage already in place
  
• Term: Short-term bridging loan, designed purely for completion and exit
  
• Security: Equity in the development site, and the director guarantees
  
• Assessment Focus: Asset value and exit strategy, not past performance

We didn’t penalise the borrower for past cost overruns. Instead, we focused on the project’s future value and the clear plan to bring it to completion within weeks.

The funds were used immediately to engage a new building team, correct defects, and finalise the internal finishes. Progress resumed quickly, and the project was back on track.

A true partnership: lending and guidance combined

This wasn’t just about funding. Bridging Loans also worked closely with the developer’s legal and construction advisors to oversee progress payments, certifications, and timelines. Our structuring team coordinated with valuers and surveyors to monitor the project and manage risks effectively.

This proactive approach preserved equity, allowed fast disbursements, and kept the project firmly on the path to completion and sales. The developer could focus on delivery while we handled the financial side.

How can a business benefit from a second mortgage loan?

Second mortgage loans are one of the most effective but underused ways to release capital tied up in property. Many business owners don’t realise they can use their equity without affecting their primary loan.

In this case, the second mortgage provided:

• Fast access to funds when timing was critical
  
• No disruption to the existing first mortgage
  
• A clear exit strategy through pre-sales and settlement
  
• Flexible terms aligned with the build schedule‍

Second mortgages aren’t just for construction. They can also be used for expansion, working capital, or even restructuring short-term debts. They offer a practical bridging solution without locking businesses into long-term commitments.

If your development has stalled, your bank has declined support, or your project just needs that last injection of funding to get over the line, Bridging Loans can help. We specialise in short-term lending solutions designed for real-world business challenges.

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