Bridging Loans

A bridging loan is a short-term, interest-only loan that provides extremely fast access to capital. Bridging finance is secured, meaning the borrower uses property (or land) as security to the lending institution. Bridging loans can be regulated, which applies when the loan is secured against a property that the borrower intends to live in or use as their primary residence; or unregulated, which is often used to bridge a payment shortfall on any other property that the borrower intends to repay at a later stage – whether through refinancing, sale or other means.

 

There are a range of people who may have use for a bridging loan, including, but not limited to those who:

• Need to complete quickly (such as when a deal becomes available with only a short window to purchase)
• Are purchasing through a property auction to facilitate faster completion within the 28-day window
• Are in a broken property chain. This can help sellers of one property to secure a new property before the sale of their property goes through (often regulated)
• Want to buy uninhabitable property. Bridging lenders will base its lending on the property’s current condition, allowing the buyer to access the property and renovate to make it habitable (with a fully functioning bathroom, kitchen, plumbing, and heating)
• Are looking to renovate or develop a current property with a view to sell it on or refinance after increasing its value
• Have to get planning permission prior to securing development funding, bridging loans provide quick access to capital for planning permission

Typical timeframes for completion are around two weeks from enquiry (on average). However, we have completed bridging loans in as little as 2 days.