Why overdraft-style finance deserves a place in residential investment – Rubins

But as residential investment becomes more complex, there’s a growing case for viewing it as part of the mainstream funding mix.

In an ideal world, development would follow a clear and steady path. A bridging loan would get the scheme underway, and term finance would take over once the work is complete. But anyone involved in the sector knows that it often doesn’t work out like that. Projects get delayed. Certification takes longer than expected. Sales slip. And funding, if too rigid, can start to cause more problems than it solves.

This is where overdraft-style lending comes in. At Alternative Bridging Corporation, we’ve seen how our Alternative Overdraft can help clients keep moving when other options fall short. It’s a revolving credit facility secured against residential property, giving borrowers the flexibility to draw down funds as and when they need them. There’s no need to reapply, and no interest on funds not yet drawn. The facility typically runs for up to two years, providing a bit of breathing space while plans take shape.

It’s this flexibility that makes it particularly suited to residential investment. Whether a borrower is waiting for planning to come through, dealing with snagging on a part-complete scheme, or simply needing time between exit and reinvestment, an overdraft facility can keep things ticking over.

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More demand for overdraft finance

There’s growing evidence that demand for these kinds of solutions is on the rise. According to the Bridging & Development Lenders Association (BDLA), bridging completions hit £2.8bn in Q1 2025 alone – matching the levels seen at the end of last year. Applications, meanwhile, were up by more than 55% on the previous quarter. It’s a reminder that speed and flexibility remain central to the way residential investment is funded.

One recent case in York shows how this works in practice. The borrower owned a site of seven part-built homes and a completed unit, which they were living in. The project was sound, with a site value of £2.8m, but progress had stalled. The finished home hadn’t received building control sign-off due to hold-ups with the Energy Performance Certificate (EPC) and electrics. And rather than a full new-build warranty, the client had a Professional Consultants Certificate (PCC).

We structured a £1.15m Alternative Overdraft across the site. The borrower could access funds as required, using the PCC as evidence of warranty and agreeing to complete building control sign-off after the facility was in place. The whole thing took just 12 working days from initial enquiry to completion.

This wasn’t a rescue deal. It was a sensible funding solution that reflected where the project was and what the client needed to get it moving again. It’s also a good example of why overdraft-style lending deserves to be seen as more than just a fallback.

For brokers, having access to this type of facility means being able to offer clients an option that matches the way many residential projects actually unfold – gradually, and sometimes unpredictably. It suits clients who are asset-rich but need access to liquidity. It supports those dealing with timing issues between exits and new opportunities. And it can often be reused across future transactions without starting from scratch.

In short, this is a product that belongs in the core funding conversation. It won’t be right for every project, but it fills a gap that more conventional finance can’t always reach. When a scheme hits pause, it can help shift things back into gear. And for investors who want to stay in control, whatever the road ahead, it’s an option worth keeping close.