Bridging Loans & Bridging Finance
Short-term flexible funding options that will help you ‘bridge’ the gap between your available capital and your future.
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.
This form of loan is widely used as a temporary solution, specifically meant for a short-term purpose. Essentially, this can provide someone with the quick cash injection they need to move forward. Funds are usually made available within a reasonable amount of time, ideal for those with a short timeframe. Bridging loan companies can help prospective property buyers secure their home by alleviating the financial gap between old and new mortgages. Ideal for those moving on from their first home. Bridging loan reviews suggest that bridging finance is a useful tool that can be greatly beneficial in a number of scenarios, including property acquisition and refurbishment projects.
Eligibility for bridging finance determined by bridging loan companies on a case-by-case basis. Due to this individualised approach, we have no set criteria for applying. Those who are eligible for bridging finance include:
- Companies and individuals
- Clients who are 18 years of age or over
- Clients with a perfect or weakened credit history
- Clients who are employed, self-employed or not employed
- Clients with property in poor condition
If you’re looking for a loan but are unsure of your eligibility, don’t hesitate to contact us for more information.
What Is The Process?
The 5 Step Process
The Bridging Loan Process Explained The entire process of applying for bridging finance can typically take anywhere between 7 to 28 days.
Overall, it’s recommended a bridging loan should be used to ‘bridge’ the gap for up to a maximum of 12 months. If you require a loan for any longer than 12 months, it’s likely a bridging loan isn’t the right option for you.
Find more information about the application process and what to expect on the right hand side. This will give you useful tips on the stages you will need to go through. Don’t worry though, we will guide you through the process as you go.
1. Processing The Application
Providing your application is approved, it will then be processed as quickly as possible. Documentation will be required to support your application. We will then send your details to the lender.
2. Client Quote
Your loan options will be discussed during your initial enquiry. You will be asked a number of questions to gain information such as: how much you’d like to borrow, how long you need the loan and what you will be using it for. Once you have provided this information, an advisor will contact you to further discuss your application in due course.
3. Legal Department Instructed
The role of the solicitor will vary depending on the circumstances, so the time this step takes can vary. The solicitor will receive the necessary papers for completion from the lender.
The lender will instruct a surveyor to carry out the valuation on the property. Note that a valuation may not be needed if the property has recently been surveyed.
5. Finalising Your Bridging Loan
You will be issued a formal offer with documentation to sign. The solicitor will then finalise the legal process to release the funds. The funds will then be transferred to you (the time this takes may vary). Following the release of funds, you will then have until the agreed date by which to pay back your loan. You will have agreed to an “exit” route, which details to us how you plan on repaying what you’ve borrowed.
Compare Bridging Loans The ideal loan for you will take into account your circumstances, i.e. what you’re using it for, and how long you need it.
Finding the best loan for you can be a confusing time with so many types of loans available. What exactly are you looking for when you compare bridging loans? Here are some key things to consider:
- What is the maximum LTV (loan-to-value)?
- How long can you take out the loan for?
- What is the maximum you can borrow?
- What would be the monthly interest rate?
There are many bridging loan companies that offer good terms but with bad rates. Therefore, you’ll need to analyse which is most important to you. A lender may be cheaper, but they may not be able to offer you as much and they could be stricter upon application. Choosing the right bridging finance for you can be confusing. To make the process easier, try our bridging loan calculator to find the best deal for you.
Bridging Loan 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 Typically bridging loan 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 to repay with then be calculated combining the borrowed amount, fee and interest. The remaining balance is the sale of the property, minus everything 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 define the maximum you can borrow is calculated from the gross loan. That’s why it can be beneficial for the borrow to use more properties, if available. This will reduce the overall interest rates. For further information on the loan process, see our info page for help and advice.
The ``Exit Route`` There are many methods for repaying your bridging finance, also known as the “exit” route.
The loan can either be cleared in full or moved on to another permanent form of finance – for example a mortgage. The exit process depends on whether your loan was open or closed. A closed bridging loan has a fixed cut-off point whereby the loan must be paid. On other hand, an open bridging loan has no repayment date specified. This means you can decide how much you wish to pay off, and when.
We would advise that you take out bridging finance for the maximum amount of time. Should you encounter any delays with your exit route, you will have more time to repay the loan. If you repay the loan quicker than you anticipated, you’ll only be charged the interest rate for that period of borrowing. For example, if you arranged the loan on a 12 months term but you are able to repay it within 7 months, you will be liable for interest in the first 7 months only.
When it comes to paying interest rates, in some cases it can be ‘rolled up’ so you pay one lump sum at the end of the lending period. However, there are also options for it to be paid back monthly. If you’d like to take a further look into our bridging finance options, try our bridging loan calculator. We will work together to find out what would best suit you.