Bridging Loans 

Bridging

Bridging loans are useful for buyers who have found a new property but haven’t yet sold their current home. Many of those involved in property development as well as buy-to-let investors find bridging loans useful.

You may have found a property you intend to buy but have not yet sold your existing home or have bought at auction, our team of bridging loan experts understand that speed is a necessity. In some cases, bridging finance can be arranged within a matter of hours or days when traditional lenders have rejected an application.

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Bridging finance is short term finance solution available usually for a period between 1 day and 12 months. Longer terms can be negotiated however 24 months is the maximum a bridging finance lender will agree to, although if necessary, we can usually agree an extension.

A bridging loan uses the equity in property as security for a borrowing. It is important to remember that bridge loans are a short term finance method and can be very expensive, so should not be taken out for long periods.

Rates will depend on the security, the borrower, the term and the loan amount required. Although the market has now become more competitive, depending on your circumstances, in some cases you might find yourself paying one per cent a month, which is the equivalent of an annual rate of 12 per cent.

A closed bridge: this is a bridging loan where there’s a guaranteed exit in place (as long term funding has already been arranged).

An open bridge: this loan is used where there isn’t a definite exit date for the lender because long term finance isn’t in place. It normally runs for a specific period (such as six or nine months but it can be longer).

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