UK Bridging Loans: Your Bridging Finance Partner
Short-term, flexible funding options that will help you ‘bridge’ the gap between your available capital and your future. Get a FREE, no obligation bridging loan quote today. Our team of brokers, here at UK Bridging Loans, is available 24/7.
Commercial Bridging Loans
Find out more about our commercial bridging loans to fund your project here.
Secured Bridging Loans
Secured bridging loans are the most popular form, securing the loan against an existing property brings better interest rates and more interest from lenders. Find out more here.
Unsecured Bridging Loans
Unsecured bridging loans are harder to get hold of as banks normally insist on securing your loan against a property/asset of some kind. However, we are approved to offer this option to customers. Find out more here.
Submit An Enquiry Online. Find out how much you can borrow today.
What Is Bridging Finance?
Bridging finance is a type of loan that gives you a helping hand in getting from one step to the other. Here at UK Bridging Loans, our experts have over 20 years experience in the sector.
Bridging loans are a type of finance which is widely used as a temporary solution and is typically meant for a short-term purpose. Essentially, a bridging loan can provide lenders with the quick cash injection they need to move forward. Funds are usually made available within a reasonable period of time, so if you are on a short timeframe, then a bridging loan may be the best option for you.
Bridging loans can help prospective property buyers or investors secure their home by removing the financial gap which so often occurs between switching mortgages. In the UK, bridging loans are the ideal financial choice for those who are moving on from their first home and are in the buying and selling process, those who are refurbishing their properties and houses purchase at auction. UK bridging loan reviews and research shows that bridging finance is a useful tool which can be used in a number of different scenarios, such as refurbishment projects or property acquisition.
The eligibility criteria for bridging loans finance is often determined by bridging loan companies on a case-by-case basis. Because of this individualised approach, here at UK Bridging Loans, we have no set criteria for applying. Those who are eligible for bridging finance include:
- Companies and individuals
- Clients who are over 18 years of age
- Clients with both perfect and weakened credit history
- Clients who are employed, self-employed or currently unemployed
- Clients with a property in poor condition
If you are looking for a loan but are unsure of your eligibility, contact the team here at UK Bridging Loans for more information.
What Is The Process?
The 5 Step Process
The Bridging Loans Process Explained
The full process of applying and receiving your bridging loan can take anywhere between 7 to 28 days. Here at UK Bridging Loans, we pride ourselves on offering quick service, as we know that you are in a time-sensitive situation.
With a bridging loan, it is recommended that the finance is used to “bridge” the gap between finance for up to a maximum period of 12 months. If you require a loan for longer than 12 months, then a bridging loan is unlikely to suit your personal needs.
Find more information on the application process and what you can expect during the bridging loan process here. Applying for any kind of finance or loan can be a daunting process, but here at UK Bridging Loans, we’re on hand to guide you through the process and offer support and advice should you need it.
The Application Process
Providing that your application is approved, then your bridging loan will be processed as quickly as possible. Documentation will be required in order to support your application. We will then send your details on to the lender.
2. Client Quote
When it comes to your loan options, these will be discussed with you during your initial enquiry. You will be asked some questions so that we can understand what type of loan will suit you, such as how much you would like to borrow, duration of the loan and what it will be used for. Once this information has been provided, an advisor will be in contact to further discuss your application in due course.
3. Legal Department Instructed
Depending on individual circumstances, the role of the solicitor involved in your bridging loan application will vary. The solicitor involved with your application will receive the necessary papers for completion from the lender.
4. Valuation
The lender will then instruct a surveyor to carry out a valuation on the property in question. It is important to note that a valuation may not be needed if the property has only recently been surveyed.
5. Finalising Your Bridging Loan
In the final steps of your process, you will be issued with a formal offer with documentation to sign. The solicitor will then finalise the legal process in order to release the funds to you, but the time in which this takes varies. Following the release of the funds, you will then have until the pre-agreed date to pay back your loan. During the process, you will have also agreed on an “exit route”, which details to us how you plan on repaying back what you have borrowed from UK Bridging Loans.
Compare Bridging Loans
The ideal bridging loan for you will take your circumstance into account, for example, what you’re using it for and how long you need to borrow it for.
Finding the best type of loan for you can be a confusing time, as there are so many types of loans available. With bridging loans, there are some things you should consider:
- What is the maximum LTV (loan to value)?
- How long can you take out the loan for?
- What is the maximum amount you can borrow?
- What would the monthly interest rate be?
There are many bridging loan companies on the market which offer good terms, but tend to come with bad rates. Therefore, you will need to analyse what is most important to you. A lender may be the cheaper option, but they might not be able to offer you as much as you are looking for and they could be stricter upon application.
Bridging Loans Example
If you are looking to secure a property, you may wish to apply for bridging finance before you miss out. In many cases of people looking for a loan, the sale of their current property has not yet been completed. That’s where our loan comes in.
This example is working on the assumption that the applicant needs a £100,000 loan as they have the remaining costs in cash. We would then be able to lend the client the £100,000 required to secure the new property.
Costs Of a Bridging Loan
Typically bridging loans’ costs consist of an arrangement fee and then your monthly interest rate which is paid in a lump sum at the end.
In the instance that the property is sold after 6 months, the initial £100,000 loan and fees from the sale will then be used to repay the bridging finance. The balance will be given to the client.
How Does Repayment Work?
The loan will be taken from the sale of the property, in this case it’s £600,000.
The total amount you need to repay will then be calculated, combining the borrowed amount, fee and interest. The balance which is remaining is the sale of the property, minus everything which has been borrowed. This will then be released to the client.
Typically, the lower the LTV, the better the interest rates. This is because the LTV used to determine the interest rate, or to define the maximum you can borrow, is calculated from the gross loan. This is why it may be beneficial for the borrower to use more properties, if this option is available. This will then, in turn, reduce the overall interest rates. For further information on the loan process, visit our information page for help and advice.
The “Exit Route”
There are many methods available when it comes to repaying your bridging loan. This is also known as your “exit route”.
Your loan can either be cleared in full, or moved on to another permanent form of finance, such as a mortgage. The exit process depends on whether your bridging loan was an open or closed one. An open bridging loan has no specified repayment date, which means that you can decide how much you want to pay off and when. On the other hand, a closed bridging loan has a fixed and pre-agreed cut off point by which the loan must be repaid.
Here at UK Bridging Loans, we advise that you take out your bridging loan or finance the maximum amount of time. This means that should you encounter any delays with your exit route, then you will have more time to repay it. If you repay the loan quicker than anticipated, then you will only be charged the interest rate for the period of borrowing. For example, if you have arranged the loan on a 12-month term, but you are able to repay it back within 7 months, then you will only be liable for interest in those first 7 months.
When it comes to paying interest rates, you might find that in some cases you can pay it back in one lump sum at the end of your lending period. However, there are some other options available where you can pay it back monthly. UK Bridging Loans will work with you to find out which option best suits you and if you would like to take a further look into our bridging loan and finance options, try out our bridging loan calculator.
What is bridging finance & how does it work?
Bridging loans, whether home or commercial, are designed to help people “bridge the gap” between their finances. All you need to do is tell the lender how much you’d like to borrow, and they’ll provide you with a quote. Then, if approved, you pay the loan back within the agreed period.
If it’s a closed loan, then you’ll need to pay it back within the cut-off date. On the other hand, for an open loan, there is no specified repayment date which means you can pay it back as and when you’re able to.
How do home bridge loans work?
Many people require a bridging loan to help them when they’re in-between moving house. This is primarily used when you’re waiting on the sale of your previous home but still want to secure a new one. It can also be used to help with renovation works or for development projects. A home bridge loan gives you flexibility when you need it most.
How much can I borrow?
The exact amount you’re able to borrow completely depends on your personal circumstances and what you can afford. To calculate what you can borrow, we need to take into consideration several factors, such as:
- Your income
- Your monthly expenses
- The amount you can afford as a deposit
To get your quote for a bridging loan, just head to our contact page and fill out our simple form.
What can I use a bridging loan for?
A bridging loan is typically required for property, and it can be used for any commercial or residential purposes. It offers a short-term financial solution for various situations. For example, it may be used if you want to secure a home while waiting for the sale of an old one. It can also be used by those who want to acquire commercial premises but don’t have funds immediately available.
What are the different types of bridging loans?
Open, closed, secured and unsecured are the four main types of bridging loans. Each offers something different and the type you require will depend on your circumstances. As well as this, there are also mezzanine finance, commercial and residential development loans.
Open and closed loans refer to the repayment period you’ve agreed with the lender. A closed loan is when there is a date by which you need to pay the loan back. An open loan means there is no set repayment period. The latter is typically only granted if you have a good credit score.
A secured loan allows you to take out a loan against your possessions, for example, your house or car, this can be beneficial for those who don’t have a good credit score. On the other hand, an unsecured loan doesn’t require you to offer up any of your assets as collateral.
For more information, visit our loan types page.
How long before I find out whether my application has been approved?
You’re likely to hear back about whether your application has been accepted within 7 to 14 days. However, the process of applying for a bridging loan can take anywhere between 7 to 28 days from application to payment.
Can I get a bridging loan with bad credit history?
Yes, in many cases it is possible to get a bridging loan with bad credit history. A secured loan is your best option because the loan can be taken out against the value of your assets. That means, should you default on your repayments, you stand to lose those assets. This way of lending can be beneficial for both you and the lender.
We assess whether someone can be granted a loan on a case-by-case basis, so even if you have got bad credit history, you can still apply.
What is development finance?
Development finance is a short-term lending solution for those who need to renovate a residential or commercial property. This can mean anything from funding light refurbishments to large scale construction projects. What’s more, it can also be used for land purchases.
For more information about the options available, take a look at our development finance page.
What does LTV mean?
LTV means Loan-to-Value. This describes the ratio of a loan to the value of the property purchased, which means it’s typically only applicable to loans used for commercial or residential purposes. It’s one of the most important aspects a borrower should look at before choosing a bridging loan company.
Can a bridge loan be used to finance land development?
Yes, a bridging loan can be used to finance land development. In many cases, this type of development finance is used by an entity to cover construction projects and land purchases. This is particularly useful for property developers who are looking to expand their portfolio but need an extra cash injection to help them along the way.
Why Should I Choose UK Bridging Loans?
UK Bridging Loans was born from a passionate team of finance experts who worked in fintech, banking and stocks trading. With our expertise in delivery and knowledge of every form of bridging loans and bridging finance, we will find the perfect, most tailored solution for your financial needs, regardless of your budget. The best part? It’s fully done online, without bulky, complicated paperwork! Are you interested in learning more about our financial options, here at UK Bridging Loans? Click here for a detailed index of our services.
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