Why a bridging loan

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Why a bridging loan?

A bridging loan is a great solution for clients that need quick access to capital. It is a short-term interest-only loan to ‘bridge’ the gap – or in other words provide some breathing space – while other finance is secured.

Although commonly used to purchase residential or commercial property, there are other things that bridging loans can be used for.


Bridging loans are more popular than ever

Conventional loans (such as mortgages) are subject to an increasing amount of red tape. As such, a loan application with a high-street lender can take months to arrange.

And that is assuming they will lend in the first instance because securing a loan has become more and more difficult too. The rules are now far more stringent and anything from a poor credit history through to a borrower’s age can make it tougher to borrow.

Yet a bridging loan can usually be completed in a matter of days. This makes it an excellent option for those who need quick access to capital, or need to buy some time – perhaps while other lending is arranged (or a property is developed).

With a West One bridging loan, lending criteria is based on the actual value of the property – not the applicant’s ability to make monthly repayments. Our bridging finance options are not just limited to property purchases either.

Reasons to use a bridging loan

  • Buying property at an auction
  • Buying-to-let
  • Buying a second property before selling the first
  • Developing/refurbishing property before full capital is available
  • Developing an uninhabitable property (when a mortgage is unavailable)
  • Short-term working capital for a business
  • Covering short-term cashflow issues or transaction deadlines
  • Financing unexpected tax liabilities
  • Purchasing land/property before planning permission or a lease extension
  • Borrowing against a property’s value as opposed to its purchase price
  • When interest needs to be deducted without repayment of the loan
  • When conventional credit is refused because of age, employment status or a poor record
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