Bridging Finance

Bridging loans are a fast and flexible way of accessing financing quickly. Here Revolution Brokers will look at the most critical factors to consider when comparing bridging loan rates, and what you should expect from the bridge finance application process. The main advantage of bridging loans is that they can be processed very quickly. Straightforward applications can be completed inside of a week, although more complex cases might take longer. Bridge loans are available to new developers and investors. However, some lenders will require applicants to have a minimum number of years of experience. If you can demonstrate a good track record and experience in the market, you are likely to find it easier to achieve competitive rates and turn around a fast bridging finance offer.

Loan applications can often feel stressful and long-winded, so knowing what information you need, and what documentation is required can streamline the whole process! Here we'll run through what is involved in applying for a bridging loan. Bridge loans are usually easier and faster to apply for than most other forms of loan since they are short-term and interest-only. Lenders won't be as interested in your income as in your exit strategy to repay the original balance. Many lenders offer online applications. Still, it's always wise to consult an independent broker before going ahead, as there may be more cost-effective options available to you. We recommend using a whole-of-market broker to recommend any financing product from any lender that we think is best suited to your bridging loan requirements.

There are two different categories of bridging loan - regulated and unregulated. While the phrase 'unregulated' might sound a little circumspect, this is actually a catchall term used for any bespoke lending, agreed on a case-by-case basis, for financing projects that do not relate to a residential home. If you take out a bridging loan against your home, you will need a regulated product. Regulated means that the lender must comply with the Financial Conduct Authority rules, which are around preventing mis-selling, and the provision of independent advice. There are since lenders will need to look at your exit strategy's strength as their primary decision-making factor.

Many developers rely on bridging loans for fast, flexible financing, and it can be the optimal solution to achieve a land purchase. the process works similarly to financing a property purchase. Bridge finance is much faster to arrange than a mortgage, although it is only short-term and does carry higher interest rates. If you're buying land with planning permission, you can use bridging finance for either residential or commercial investments, and the lender will primarily be interested in your exit strategy. Land finance can be challenging, as most bridge lenders prefer property investments at a lower risk. However, if you have sufficient security, and can demonstrate how you will repay the loan, there are options.

UK bridging loans are an alternative form of short-term financing that has many applications. Bridging loans are very flexible and can be used by private residential buyers or businesses, to buy commercial properties or land, and pretty much anything else provided there is a good exit strategy in place. Most lenders primarily care about the exit strategy - if there is a rock-solid way to repay the loan, they won't be as concerned about your income or credit rating. However, anything that makes the loan riskier will push up the interest costs.

When we think about buying a home, we often believe that only residential mortgages are available to finance the costs - but there are many different options! Bridging loans are most commonly used for property development projects or investors, but there can be circumstances when a bridge is the best choice for a residential property purchase. Bridging finance is a short-term loan, secured against a property, and usually runs for less than a year. They are interest-only, so you pay back only the interest element each month, or this might be rolled up into the loan and be repayable at the end of the term. Your loan is secured against the property, and you can find fixed-rate loans or tracker loans, as with a typical mortgage. If you hear the term bridging mortgage - this isn't precisely a mortgage, but a bridging loan used to purchase a residential property.

Bridging finance is a lot more flexible than a typical mortgage, and there are numerous products on the market. The best option for you depends on your circumstances, finances, and what you need the bridging loan for. Here we'll run through additional charges on the same property, and the key considerations you need to bear in mind. If you have a mortgage already, and then secure a bridging loan against it, you are taking out the new borrowing as a second charge. Much depends on the lender, how much equity you own, and what you are borrowing since your mortgage lender would be first in line to claim the proceeds should you fail to keep up with the repayments and end up in a repossession scenario. Some bridging finance providers do not offer second charge loans, but many will. The business strategy and stability of your exit plan will have a big difference. There aren't any fixed criteria, so each lender will decide whether they are comfortable accepting a second charge.

Revolution Brokers often deals with enquiries for bridging finance, with no deposit, or very little to put down. There are 100% LTV bridge loans available, but the qualification criteria tend to be very strict. A bridge loan at 100% LTV means that you do not put down any deposit. This product isn't the norm, as most bridge loans required at least a 25% to 30% deposit as an absolute minimum. Few select lenders will offer 100% loans, but the circumstances must be right. You will need additional security to mitigate the risk.

Most applicants choose bridging finance because they need funding quickly, or need to finance a project outside of the scope of a traditional mortgage. Most lenders assess every bridge loan application on a case-by-case basis, so it isn't always obvious who offers the most competitive rates. The best option is to appoint an experienced broker who can identify the right lenders, and take a view as to who is most likely to approve your loan against their eligibility criteria. Some of the best bridge loan deals are available only through brokers and are not available directly to the public. Applying to the wrong lender can cause further problems, delay your access to lending, and leave marks on your credit file.

Commercial bridge loans are an alternative borrowing option for many business deals - and it is essential to ensure you get the best offers out there! Commercial bridge loans work just like any other. This lending is short-term, interest-only, and more flexible, so it is ideal for projects such as purchasing a property to develop. Your bridging finance is deemed a commercial product if you purchase any property with at least 40% of business premises. Therefore, if a building has some residential use and some commercial, you'll need at least 40% of the site to be commercial to apply. Loans are interest-only, so you can pay that interest each month, and pay back the original loan value at the end of the term. Alternatively, the interest can be rolled up, making a total balance repayable of the original loan, plus the accrued interest.

Property auctions need you to move quickly, and auction finance or a bridging loan can be the best option to put funds in place in time. Auction finance is a type of bridge loan, secured to help you pay for a property sold at auction quickly. This lending is short-term, and interest-only, and is substantially faster to organise than a traditional mortgage. Expedited bridge loans can be arranged in just a few days, and usually require only a valuation of the auction property to proceed. Interest rates are higher than a mortgage, as you'd expect from a short-term loan, but can help you complete an auction purchase whereas a mortgage would have taken too long to arrange.

Lenders vary across the UK. While it might be easier to find a local bridging loan provider in central London than in Scotland, there are always options, wherever you are based, and even if you need bridging finance for an overseas project. there are fewer UK bridging loan lenders who will consider financing an international investment. The most common scenario is where you use a UK asset or property as security to take out the loan, and then use the cash raised to purchase your overseas investment. In terms of the exit strategy, you could remortgage the overseas property through an international mortgage provider, sell your UK asset to raise the capital, or use another form of repayment if the lender accepts that exit strategy.

Bridging finance might be a quick and easy way of raising borrowing, but as with any loan, having adverse credit can make the application process a little trickier. You can, but it's vital to consult an independent broker before making an application. Your exit strategy is the essential factor, and so you can find a short-term loan on an interest-only basis with most types of credit issues. While some bridge lenders are reluctant to lend to applicants with an adverse credit history, there are plenty who will be happy to lend provided you can demonstrate a good exit strategy or offer a higher deposit to mitigate the risk factor.

Properties such as hotels and care homes are key investments where bridging finance can help - and here we'll run through when this funding option might be the best option. Bridge finance is faster and more flexible than a mortgage, and so is a way to raise capital when you need to move quickly - that might be buying a business or property at auction, for example. Some properties are uninhabitable, and therefore ineligible for a mortgage. In this case, a bridge loan allows you to carry out the renovation works, and then remortgage once the property is in a habitable condition. The critical difference is that commercial bridging loans are bespoke, and therefore unregulated. Not every lender provides this type of short-term financing,

With so many lenders to choose from and substantial variances in eligibility policies, selecting the right bridging loan broker is essential to secure quick, affordable borrowing. Revolution Brokers is an independent, whole-of-market broker with years of experience in the bridging finance sector. Specialist brokers and lenders can offer alternative financing to applicants with bad credit history who need niche borrowing. In this situation, the strength of your exit strategy is key to securing affordable rates. Our team works with applicants with all sorts of credit issues, including low credit score, missed mortgage payments, CCJs, DMPs, IVAs, repossessions and bankruptcy. Provided you have a viable proposition and can prove how you will pay back the debt; you can usually find competitive bridging finance.

Bridging finance is one of the fastest and most flexible forms of loan - but if you are on a tight deadline, is it quick enough? The Revolution team regularly receives enquiries for bridging loans in a very short timescale, so here we've summarised all the essential information about how to secure a deal fast. Straightforward applications can be completed very quickly, with conditional offers in place in just a few days. If your application is more complex, it might take a couple of weeks - but significantly less time than a mortgage.

Bridging loans are designed as a short-term financing option - but knowing exactly how long you can borrow for depends on the lender and the project! Here we'll explore bridge loan terms, and what you might expect as a minimum and maximum length. Most bridge loans are due for repayment in a year, or just a few months.

Bridging loan calculators can be a useful way to get a rough idea about what you could borrow - but since this form of lending is so tailored, it is impossible to make an application on the strength of an online tool. There are no published standard bridging loan rates since this type of lending is decided on a case-by-case basis, so the only way to get an idea of available rates, and compare different products, is to consult an independent bridging loan broker.

Bridging loans provide a bridge to cover the costs of capital required, and until the property is completed and can be remortgaged or sold at a profit. This type of loan is flexible and can be used for small renovations through to complete builds. It's worth remembering that bridge loans are higher in interest rates than mortgages, so it's important to acknowledge the loan's short-term nature and have a solid exit strategy to repay it.

Bridging loans have multiple applications and are usually a great option when you want to invest in a property that is difficult to get a traditional buy to let mortgage against. This guide will run through short-term financing for rental investments and all you need to know before applying.

Short-term bridge loans carry higher interest rates than traditional mortgages, but there are also other associated costs to factor into your budget before applying. The critical difference with a bridging loan is that it is only ever intended to be short-term, and provide the bridge between the need to make an immediate purchase, and finding suitable longer-term lending. Lenders will require evidence of a stable exit strategy to be confident that you can repay the loan at the end of the term.

Bridging loan finance is popular for developers who need fast funding, with flexible terms. The Revolution team often receives inquiries about the maximum loan value, which depends on multiple factors! In this guide, we'll summarise the core criteria for securing a larger bridging loan. Different lenders will all have policies about what they consider a large loan - there isn't any fixed cap on bridging finance, which can run into many millions.

However, even on the tightest of deadlines, you want to know you're paying the best interest rates available to preserve your overall budget. Rates can change very quickly, and lenders might offer significantly different rates to two customers, depending on the scenario, amount you wish to borrow, and deposit available. The only way to secure the lowest interest rates on a bridging loan is to consult a whole-of-market broker who can advise which products are available with the cheapest costs.

A bridging loan broker is invaluable in ensuring you find the right borrowing at the right time and the right price! Bridging finance is a hugely flexible option and can be a solution in many situations. However, there is a vast array of products available, and you must choose the one that is right for you. Bridging finance brokers don't only ensure you get the capital you need as quickly as possible - but negotiate the terms and fees associated to save you money.

Buying a property at auction can be a fantastic way to find a real bargain - but when it comes to taking out a mortgage, the process isn't quite so simple! The biggest challenge for auction property purchases is the timing. Mortgages take time to apply for, with all the eligibility and affordability checks involved. This situation is where auction finance is worth its weight in gold, providing a short-term, fast turnaround loan to ensure you don't miss out on a dream purchase or end up losing your deposit.