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Bridging Finance
in a nutshell
Bridging loans are short-term secured loans, traditionally associated with ‘bridging the gap’ between buying a new property and selling an old one. They are often used by property developers to bridge the gap between the purchase of a property and organising longer-term finance like a mortgage.
Bridging loans are often used in tandem with development finance. Either to help purchase the property, or as an exit strategy when a project is completed, whilst longer-term finance is organised.
Sometimes, a bridge can be used for business purposes, as a quick and cheap alternative to an unsecured loan. Bridging loans are renowned for speed and flexibility and can sit behind a traditional mortgage either as a second charge or sometimes third.
Typically, lenders will lend up to 70% of the value of the property, either 1st, 2nd or 3rd charge. You as a borrower will have to pay for the valuation (although some lenders do desk-top valuations for easier, more time-sensitive deals) and lawyer fees of the lender. As long as the valuation report matches your expectation of the property’s value, and the lawyers find nothing untoward, lending should be released quickly.
Some of our lenders
Speed
Bridging Loans can be wrapped up in as little as 2 weeks.
Flexibility
Bridging lenders are renowned for being extremely flexible, often extending terms or allowing interest repayments ad-hoc. They will often endeavor to work with you as much as possible.
Retained interest and fees
You do not have to make monthly payments, there is just one settlement payment at the end of the term.
Loose criteria
When compared to traditional property lending products, fixed criteria are virtually non-existent in bridging finance. As long as you have the required collateral, you should be able to access finance.
