Fast, clear property finance that keeps your plans moving.

Bridging finance, or a bridging loan, is a short-term, secured loan designed to "bridge" a financial gap when a property transaction needs to happen quickly. It is typically used for periods of up to 12 to 18 months and is repaid in a single lump sum, not through monthly payments. 

Bridging loans are most commonly used in property-related situations where speed is essential, such as: 

• Buying at auction: To meet the strict, short deadlines for purchasing a property at auction.
• Renovation and refurbishment
• Securing a buy-to-let or commercial property: To acquire a property that a traditional lender won't fund.
• Below market value: To fund a transaction that is secured less than the true value of the asset prior to refinancing onto a term loan at the full value.
• Development exit: To refinance a development loan while the units are sold off individually.
• Pre-planning bridge: To fund a land purchase while planning permission is secured and the asset is either sold or development finance secured.
• Stabilisation loan: To fund a property which requires asset management prior to being fully income generating and can then be sold or term finance raised.

• Secured against an asset: The loan is secured against property or land, which means you could lose the asset if you fail to repay.
• Personal guarantees: The risky nature of these loans and the often-high LTV provided means an element of personal recourse is always required.
• Speed: Bridging loans are known for their fast turnaround, often being arranged in weeks rather than months

• The amount depends on factors such as the loan-to-value (LTV), the property type, and your exit strategy.
• Typical maximum LTVs are 70–75% for residential properties, though some lenders may offer up to 80% or 85% in specific circumstances
• Loans can range from £25,000 to millions, depending on the lender and project.

• Cash deposit not always needed: While a cash deposit is typically required for the property purchase, the bridging loan itself is secured against collateral rather than a cash deposit.
• Use equity as collateral: Instead of a cash deposit, you can often use the equity in another property you own as additional security.
• LTV determines the deposit: The required deposit is directly related to the lender's LTV. For example, a 75% LTV means you need to cover the remaining 25% yourself.

• Higher interest rates: Bridging loans have higher monthly interest rates than term loans, typically ranging from 0.75% to 1.5%. This translates to a much higher Annual Percentage Rate (APR) than a term loan.
• Additional fees: Expect to pay other fees, such as arrangement fees (1–2% of the loan amount), valuation fees, legal fees, and potentially exit fees. 

Typically, 3 months – 18 months, but will be assessed on a case-by-case basis

• Exit strategy: Before lending, it is vital that there is a clear and realistic "exit strategy" detailing how you will repay the loan.
• Common exit strategies: The most common methods are selling the property (or another property) or refinancing onto a term loan
• Interest repayment options: You can pay the interest monthly (serviced), have it added to the total loan amount and paid at the end (rolled-up), or have it deducted upfront from the loan (retained).

• High cost: The high interest rates and fees can become very expensive if the loan term is extended.
• Risk of repossession: As the loan is secured against property, you risk losing your asset if you cannot make the repayments.
• Potential for delay: If your planned exit strategy is delayed (e.g., a sale falls through), costs can increase rapidly.