Bridging loans are a type of property finance designed to help borrowers straddle the financial gap between two stages of a development or multiple property purchases, so they are typically short-term loans only. They are intended to be arranged fast to assist with cashflow issues, then paid back quickly once longer-term finance has been secured.

They provide a temporary financial solution to keep projects on schedule, but they tend to have higher interest rates because of their short-term nature. The exact interest rate depends on the circumstances of your project, including the urgency and scale of the loan, but bridging loan interest will be quoted monthly instead of annually.

The way it works is similar to applying for a traditional loan – you first make an enquiry about bridging finance for your situation, receive indicative terms (subject to credit approval and receipt of more detailed information), followed by a decision in principle (subject to valuation and due diligence), then legal paperwork is issued and the loan drawn down at the soonest availability.

Speak to us at ABC+ Architects Certificate to find out how we can help with bridging loans.

While it is typically used by property investors and landlords, bridging finance could be an appealing option for anyone who needs to borrow money quickly to fund a property purchase or refurbishment – bearing in mind that the loan needs to be paid back fast, too.

Common reasons to take out a short-term bridging loan include purchasing and/or renovating investment properties for redevelopment, expanding property portfolios in advance of long-term mortgaging, and buying a property at auction. Bridging loans can be especially useful when funds are needed to buy a second property when a current property has yet to be sold.

This type of finance can be used for most kinds of property development – whether it’s a new-build or older building, self-build or commercial development, a light refurbishment or full conversion. As long as there is a clear exit strategy for paying off the loan within the specific term, such as refinancing later on, there should not be too many restrictions on using a bridging loan.

Contact the ABC+ Architects Certificate team to learn more about bridging loan terms.

Bridging finance is typically available for individuals, companies, and trusts based in the UK. This loan may be right for you if the property you require funds for is not currently in mortgageable condition, or you need the funds much faster than traditional lenders can provide them.

Whatever the case may be, the eligibility criteria for bridging loans tends to be more flexible than traditional long-term facilities – but an applicant’s bridging loan eligibility depends on a range of factors, such as the type of property, loan to value, and exit strategy.

While specialist lenders can tailor their requirements to suit individual needs to an extent, they may still have an eligibility framework that your enquiry must fit within. For example, there may be minimum and maximum loan amounts available, limited timeframes for repayment, and higher interest rates dependent on the applicant’s credit history.

Such information should be communicated to you when you first make an enquiry, as we can only proceed with your application if your circumstances are suitable for the bridging loans we facilitate.