Bridging Loans

Do you need bridging finance fast?

Bridging loans are generally avilable from £30,000 - £5 million, with terms from one to twelve months with extensions available.

A bridging loan has a higher interest rate than a conventional mortgage, but with the great advantage that you can obtain the funds quickly, often within a few days - crucial in some property purchases. There are potential pitfalls, so you need to make sure that you get professional advice

Bridging finance is simply short term property loan finance provided as a temporary (say 3 months) loan "bridge" which can be redeemed by either a replacement long-term mortgage or by sale of the property.

Bridging loans are secured against UK property. Higher interest rates are usually charged for bridging finance.

Bridging loans are increasingly an acceptable and affordable way of financing short term commercial property deals and property development and provide the ability to act quickly.

Bridging loans are normally from £50,000 to £5,000,000 with periods from one week to twelve months and interest terms linked to bank base rate. Dependent upon your proposal, short-term bridging loans can be considered outside this range, up to £10 million.

The main attraction of a bridging loan is that when you are in a hurry, funds can be made available to you in as little as 48 hours, but in the majority of cases bridging takes 5 -14 working days. This is still less than a third of the time required for a conventional mortgage.

The majority of bridging lenders lend on a non-status basis, they are primarily concerned with the property being offered as security. They will lend on average up to a maximum of 65%- 75% loan to value (LTV) on a 1st charge basis and 60% - 70% of LTV on a 2nd charge basis; most lenders will provide bridging finance on a LTV based upon the true market value of the property and not the purchase price.

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