Short-term lending secured on property, drawn in weeks rather than months and repaid from a sale or a refinance. The exit is what a bridging lender underwrites, so the exit is the first thing we evidence.
£10,000 to £2 million and above · 1 to 24 months · first or second charge · up to around 75% LTV gross
Typical situations
The hammer falls on a Tuesday and completion is 28 days later. No term lender will value, underwrite and issue an offer inside that window, and walking away costs the deposit as well as the property. The bridge completes on time and the refinance onto a term facility starts the week after, rather than the other way round.
The onward sale slips and the purchase you have agreed will not wait. A bridge secured on both properties completes the purchase, and is repaid when the sale finally goes through.
Empty, part-let, or a flat with no kitchen in it. Term lenders price off the condition on the day of valuation, so the works come first, funded short term, and the commercial or buy-to-let mortgage follows on the improved value.
The gross loan is the figure the facility is written for. The net loan is what actually reaches you, after the arrangement fee and, on a retained interest deal, after the interest for the whole term has been held back at the start. Two lenders quoting the same gross figure can leave very different amounts in your account, which is why offers are compared on the net.
Interest is either retained or serviced. Retained means nothing to pay monthly because it has already been deducted, which suits a project with no income until it sells. Serviced means you pay it each month and more of the loan reaches you up front, which suits a property already producing rent.
The exit is the repayment: a sale, or a refinance onto a term facility. A bridging lender is lending against the strength of that exit far more than against your accounts, and an exit that has not been tested is the most common reason a bridge ends badly.
Indicative market ranges, not an offer of finance. Terms depend on the lender, the security and your circumstances.
What the lender assesses
What goes in the pack
The exit is evidenced before submission: comparables and an agent’s view where the plan is to sell, or indicative terms from a term lender where the plan is to refinance. The underwriter is not asked to take it on trust.
The valuer is briefed at instruction with the schedule of works and the comparables, and access is arranged at the same time rather than chased after the report is late.
Solicitors are instructed alongside the valuation, so restrictive covenants, short leases and missing rights of way surface at the start, when there is still time to deal with them.
Whether interest is retained or serviced changes what you actually receive, so the net figure is agreed at the outset rather than discovered on the offer letter.
Indicative terms often come back within days. Completion usually takes two to six weeks, and what sets the pace is the valuation and the legal work rather than the lender’s decision. Where the deadline is fixed, such as an auction, the date goes to the lender at submission so the valuation is instructed immediately.
The gross loan is the amount the facility is written for. The net loan is what reaches you after the arrangement fee and, where interest is retained, after the interest for the term has been held back. Two lenders quoting the same gross figure can leave very different amounts in your account.
Not always. Retained interest is taken from the loan at the start, so there is nothing to pay each month but less money reaches you. Serviced interest is paid monthly and more of the loan is released up front. Which one suits depends on whether the property produces income during the term.
Lending to a company or an investor secured on a property nobody in the family occupies is generally unregulated. Where the security is a home you or a family member lives in, the loan falls within Financial Conduct Authority regulation and we refer it to an appropriately authorised firm rather than arranging it ourselves.
Say so early. Most lenders will consider an extension where the exit is real and moving, and the terms are better arranged before the facility expires than after it has. This is the reason the exit is tested at the start rather than assumed.
Where the works go beyond a refurbishment and the money needs to release in stages against a monitoring surveyor.
The usual exit from a bridge on commercial property, and worth having indicative terms for before the bridge completes.
Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
We will come back with how we would structure it and which lenders it suits. If the deadline is an auction date, say so in the first line.
