What is a bridging loan?
A bridging loan is a type of short-term, property backed finance that is used as a temporary loan to fund the gap between 2 events occurring.
Common uses for hotels are to fund the gap between a hotel purchase and the property being ready to qualify for a commercial mortgage, or to refinance a hotel while waiting for it to sell.
Bridging finance differs from other types of finance as there are often no monthly payments to make, with the interest often being added to the loan.
Who can apply?
We can fund bridging finance for hotels for almost any borrower, including:
- UK Individuals
- Overseas individuals
- Expats
- Partnerships
- LLPs
- Limited companies
- SIPPs
How quickly can I receive the funds?
We can complete an application for a hotel in as little as 1 week. The speed of your application will depend on how quickly the valuation and legal process can be navigated.
Most applications take around 3-4 weeks on average, with the main time taken being either waiting for the valuation report or legal process to progress.
To speed up your application, ensure that your solicitor is experienced in handling commercial bridging loan transactions and has the capacity to move quickly.
Will I qualify?
If you own or are purchasing a hotel, have sufficient equity and a robust exit strategy, there is a great chance that you’ll qualify.
We can fund all types of borrowers on properties throughout the UK.
Do borrowers with bad credit qualify?
Yes, we offer a specialist range of bad credit bridging finance products that can be used to finance hotel purchases or refinances.
Acceptable credit issues include missed payments, defaults, CCJs or IVAs and CVAs.
How much will it cost?
Bridging loan interest rates for hotels start at 0.75% per month.
The rate you pay will depend on the loan to value of your application, the quality of the security property and your plans for the property once the loan completes.
For most applications, the rate charged is between 0.75%-1% per month.
What information will I need to provide?
When you apply for a bridging loan, your lender will expect you to provide certain information and documents. While they sometimes vary, a typical application for a hotel will require:
- Details of the purchasing entity (individual or company)
- Details of the property and your plans for it
- Details of your exit strategy
- Proof of ID and address
- For refurbishment projects, costings and a schedule of works (we can help with this)
- Where you plan to pay the interest monthly, proof of your ability to do so will be required.
Can you fund closed hotels?
Yes, we can still offer finance if your hotel is not currently operating, if you have a suitable exit strategy.
Understanding your exit strategy – how you plan to repay the loan is key to these applications, but as long as this is robust and you meet other criteria, we can help.
