Bridging loans are a short-term lending solution for circumstances where speed and reliability are essential. We utilise our relationships with both mainstream & private banks and specialist lenders to access the best available rates on the market. Our specialist bridging finance brokers have a wealth of experience arranging the most suitable financial solutions.
Bridging lenders know we work closely with our clients and we can often get borderline applications agreed where others can’t, so it’s definitely worth talking to us even if you’ve been turned down elsewhere.
How long can a bridging loan last?
Bridging finance is designed to be short-term funding and is usually arranged for up to 12 months. However, some lenders will consider applications that go beyond this, with 18 – 24 months possible, depending upon individual circumstances.
What’s an exit route?
With bridging finance being a short-term solution, every borrower must have a creditable exit strategy to repay the loan. This is often to sell the property or refinance onto more traditional property loans.
When might bridging finance be the best option?
Bridging loans are mainly used by clients that need quick, short-term capital secured against either property or land. Typical scenarios include:
- A broken property chain. A bridging loan enables a seller of one property to secure their new property before the sale of their existing property goes through.
- Buying at auction. Bridging finance is popular with those buying property at an auction where completion has to take place within 28 days where traditional financing can often not be organised quickly enough.
- Buying an uninhabitable property. Traditional lenders will often not lend on a property if there is no kitchen, bathroom, central heating or running water (especially buy-to-let mortgages). Bridging finance is ideal to get the work completed and make the property habitable, before refinancing onto more a more standard mortgage.
- Requiring planning permission. Bridging loans can be used in the interim period whilst obtaining planning permission before securing development funding.
- Needing a lease extension. When a property has a short lease a borrower will likely be refused a traditional mortgage. A bridging loan can be used to extend the lease, which then makes the property mortgageable through conventional lenders.
- Renovating or developing a current property. A property investor may want to renovate a property within a few months and either sell it on or refinance. A bridging loan can often be the perfect vehicle for this short-term capital requirement.
- Needing flexible lending criteria. Bridging lenders are typically less concerned with income, affordability, age and credit history. Their priority is the value of the property being offered as security and also the exit route.
A bridging loan or bridging finance is a great solution for clients that need quick access to capital. It is a short-term loan to ‘bridge’ the gap – or in other words provide some breathing space – while other finance is secured.
Nicholson Brown Limited is authorised and regulated by the Financial Conduct Authority under register number 671013.
Your home (or property) may be at risk of repossession if you do not keep up repayments on your mortgage or loan secured upon it.
We do not charge for our initial consultation, however we charge a brokerage fee for residential and buy to let mortgage applications. The fee is dependent upon the complexity of your case and is typically up to £500, payable upon completion of the transaction.
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