What is Bridging Finance?
Bridging finance is a type of short-term loan, typically lasting 3 to 36 months, that can be used for different purposes until long-term funding, sale of a property, or when the next stage of financing becomes available.
The typical maximum Loan-to-Value ratio of a bridging loan ranges from 60% to 80%.
Bridging finance can be used by both individuals and businesses, usually lasting less than 12 months. They tend to offer a maximum of £5 million worth of lending, though it may be possible to get larger loans through specific lenders.
How much you are able to receive will vary depending on the security you offer, as well as the lender you choose.
Bridging loans come in two types: open and closed. An open loan is where there is no fixed end date to the loan, but it is expected that you will pay the balance back within the agreed set term. This is ideal if you aren’t quite sure how long you will need the finance for: for example, if you know you have long-term funding coming in, but don’t know when this will start exactly. Alternatively, a closed loan will have a set end date. This means you will have an exit from the finance in place, which usually means lenders are willing to offer lower interest rates as they know they will be repaid in the agreed timeframe.
As per any loan, you will need to apply for bridging finance. Bridging finance is secured, so you will likely need to have some form of assets to use as collateral as well as a clear strategy on how the bridging finance will be exited e.g. a property sale.
What can Bridging Loans be Used For?
When compared to other sources of financing, bridging loans have numerous advantages. When funds are needed for a short period of time, they are frequently the most cost-effective way to raise the necessary funds. Furthermore, they are simple to set up, offer broad lending criteria that allow approvals to be provided swiftly without thorough investigations, and they can be secured on a variety of properties, including some that are inappropriate for other lenders.
Property Auction Finance
Bridging Loans for Developments
Land Bridging Finance
Residential Property Bridging (Please note we do not offer regulated bridging)
Commercial Bridging Loans
Semi Commercial Bridging Loans
Refurbishment Finance and Incomplete Property Loans
Resolve short-term cash-flow issues in your firm
Renovating, converting, or restoring properties