Fast bridging loans, quick financing from £10k to £250m in as little as 3 days
Our experienced bridge finance experts can help you get a bridging loan fast, you could borrow from £10k to £250m in as little as 3 days with our fast bridging finance service.
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Quick bridging loans by ABC Finance
We’re experts at arranging fast, low-cost bridging loans
Our aim is to save you time and provide a bespoke service that suits your unique circumstances. The speed at which your bridging loan is arranged depends very much on the lender you choose and this is where we can help; ABC Finance specialises in fast bridging finance matching you to the right lender from our wide panel.
ABC Finance has deep experience in bridging finance and our friendly experts can guide you through the process, including paperwork requirements, supporting you to ensure a quick turnaround.
Talk to Lee about financing a fast bridging loan
If you need an urgent bridging loan, get in touch with Lee today. Fast bridging loans of up to £300k can be arranged and paid in as little as 72 hours.
Lee Hemming is a specialist bridging loan advisor at ABC Finance with years of experience arranging the right finance solutions for our customers. Call, email or contact ABC Finance today to learn more.
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Complete the form below to receive a fast and free bridging loan quote from our expert team.
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How quickly can you get a bridging loan?
Bridging loans can be arranged very quickly, the loan process can typically be completed, included transfer of funds within 3-21 days. If you are looking for urgent funding then get in touch as ABC Finance can work with our wide panel of lenders and get a funding decision in hours. Bridging loan funds can be made available in a matter of days in some cases.
You can read the ABC Finance guide to bridging loan timescales for further information on how long the application process takes.
Our fast bridging loans timescales:
Loan
Timescale
Up to £300k
3 Days
Up to £750k
7 Days
More than £750k
3 Weeks
What can you do to speed up the loan process?
If you need an urgent bridging loan it is advisable to work with a specialist bridging loans broker, this is because applying to lenders individually is a time-consuming process and repeat applications are not helpful for your credit file.
A broker will advise on what documentation is needed, from the list above, and match you with lenders that suit your circumstances; for example, if you have adverse credit or require a particularly significant amount of funding. It is essential that you are upfront with your broker, or lender if you apply directly, about your circumstances so they can find a solution that works for you from the outset.
If you are looking for a fast bridging loan it’s likely you will have to forego some of the optional stages in the loans process, such as undertaking surveys. This will increase the risk to the lender and so rates are likely to be slightly higher for a speedy turnaround.
If you chose to use a solicitor, and in some cases this will be a requirement, make sure to use a solicitor with experience in the bridging loans sector to streamline the process.
How easy is it to get fast bridging finance?
Getting bridging finance is generally easier than securing a traditional mortgage, as lenders prioritise the value and security of the property over personal creditworthiness. Bridging loans are designed for speed, with many applications approved within days, making them suitable for time-sensitive situations like auction purchases or chain breaks.
Eligibility largely depends on the loan-to-value (LTV) ratio, the property’s value, and a clear repayment strategy, such as a sale or refinance. While bad credit or unconventional properties can pose challenges, many lenders specialise in such cases.
However, bridging finance comes with higher interest rates and fees compared to standard loans, so it’s important to ensure affordability. Working with a specialist broker can streamline the process and connect you with the most suitable lenders for your needs.
Why choose ABC Finance?
The fast bridging loans specialists
Established 2000
ABC Finance has been helping people get the best deal since 2000.
FCA Regulated
We’re fully regulated by the Financial Conduct Authority
We Save You Money
Our entire ethos is built around helping people save money.
What our customers say
Anita Q
I cannot thank Richard and Sophie enough for helping me at a time when I needed financial guidance and support. They were simply amazing.
Daniel M
Very professional in every way, the fees are extremely reasonable compared to other companies, thanks guys
B. Barber
I am not normally one to leave reviews, however, the service I have received from ABC Finance is exceptional and I would recommend them to anyone who is struggling to find a reliable service.
Our awards & recognition
Commercial Finance Service of the Year
2022 Winner
Best Commercial Financial Experts (Midlands)
2022 Winner
Commercial Finance Company of the Year
2022 Winner
Best Broker: Commercial and Specialist Finance Broker of the Year / Bridging
2022 Nominated / 2020 Shortlisted
Request a free & fast bridge loan quote
ABC Finance specialise in fast bridging loans for residential and commercial property
Complete our quote request form below and a member of our bridging team will find the best loan options for you.
Same day terms
Fast bridging finance solutions with written terms in 2 hours and funding within 72 hours
Expert Team
Friendly specialist team to guide you through the process
A range of funding options
Loan from £10k to £2m for residential and commercial purposes.
Low Interest Rates
Rates from as low as 0.43%
Quick funding
Funds transferred to your account in as little as 72 hours
Flexible terms
1-36 months term length (maximum 12 months for regulated loans)
Our fast bridging loans success stories
Quick Regulated Bridging Loan Secured for Property Purchase
Re-bridge Loan Secured for Pub to Residential Conversion
Auction Purchase Using A Regulated Bridging Loan
Bridging Loan to Raise Money for Property Purchase in Asia
Urgent Bridge On An Un-Mortgageable Property
Bridging Loan Secured for Quick Auction Purchase
Learn more about fast bridging loans:
- What is bridging finance?
- How do bridge loans work?
- How much can you borrow with a bridge loan?
- What are the different types of bridging loan?
- How much does a bridging loan cost?
- Do you need a deposit for a bridging loan?
- Do you need a valuation for a bridging loan?
- How do you compare bridging loans to each other?
- What can you use a bridging loan for?
- What is the eligibility criteria for bridge financing?
- What is an open vs. closed bridging loan?
- Are bridging loans a replacement for a mortgage?
- Can you turn a bridging loan into a mortgage?
- Is a bridging loan more expensive than a mortgage?
- What are the alternatives to bridging loans?
- Can bridging loans be used for auction purchases?
- What are the advantages of bridging loans?
- What are the disadvantages of bridging loans?
- What paperwork do you need to get a fast bridging loan?
- How do you apply for a quick bridging loan?
- How is a bridging loan secured?
- What are the risks of taking out a bridging loan?
- How are bridging loan repayments structured?
- What happens if you can’t repay a bridging loan on time?
- Why is a bridging loan broker useful?
- Should you go to a lender directly?
- How do you find the best bridging loan for my needs?
- Can you still get bridging finance if another lender has turned me down?
- What exit strategies will your lenders accept on bridge loans?
- Frequently asked questions
What is bridging finance?
Bridging loans are a flexible form of funding for significant purchases such as buying property, expensive equipment or land. They can be arranged quickly and support a range of purposes. This type of funding is growing in popularity and is used by residential homeowners and commercial investors alike for situations where a mortgage isn’t possible or can’t be arranged in time.
A bridge loan is not a mortgage, although it is secured against property, and can help provide finance when you are buying a home, commercial premises or land. It is a short term product that originated in the residential property market in the 1960s. The loans were a niche product to ‘bridge’ the gap between selling one property and buying another.
As a short-term form of funding a bridging loan has an average repayment term of up to 12 months, although this can extend to 36 months.
The bridge loan market has been growing rapidly over recent years and bridging finance is popular with investors and property developers. A fast bridging loan can help in a variety of situations, such as buying a property at auction when the full purchase price must be settled within a month.
Interest rates are applied on a monthly basis, in most cases, and paid back at the end of the loan term.
How do bridge loans work?
Bridging loans are a straightforward way to raise significant funds in a short time-frame compared to mortgages and other options. They are not designed to be used over the longer term, however are a great option when fast funding is required to seal a deal or prevent a sale falling through.
Fast bridging loans for residential property and homebuyers in England
An example of how a residential bridge loan would work:
- You want to buy a house for £600,000 and you need to put down a £200,000 deposit and borrow the rest on a mortgage.
- Your house hasn’t sold yet and you only have £50,000 in savings.
- You ‘bridge’ the gap and get a bridging loan for £150,000 to cover the deposit until you sell your house.
- When your house sells you pay off the bridging loan with interest (accrued on a monthly basis and payable at the point of loan exit.)
How much can you borrow with quick bridging finance?
The amount you can borrow with a quick bridging loan varies and depends on the equity, or value, of your property, minus any outstanding mortgages or loans you have secured against it.
The majority of lenders will loan up to 75% of the property’s value, also known as Loan To Value (LTV.) Loans up to 75% LTV are regulated by the Financial Conduct Authority, however, unregulated loans beyond this figure are possible up to 85% LTV.
In some circumstances a 100% loan will be possible, however, this is rare and usually for commercial properties where other assets are used in addition to property to secure the loan. Preferential bridging loan rates will usually apply to loans at under 50% LTV.
As bridging loans are used as a fast form of finance in a wide range of scenarios from renovations to significant commercial developments they can range from £10,000 to £250,000,000.
Use our bridging loan calculator to work out your LTV and see how much you could borrow.
What are the different types of bridging loan?
There are several types bridging loan, they are:
Closed Bridging Loan
Closed bridging loans have a fixed repayment date and set interest rates, making them lower risk for lenders. They are ideal when a property sale date is confirmed. With a fixed term, interest is typically added to the loan, avoiding monthly repayments.
Open Bridging Loan
Open bridging loans lack a defined exit strategy and have longer loan terms. As they carry higher risk for lenders, they are more expensive, with monthly interest payments required instead of rolled-up interest. Borrowers must demonstrate affordability, and underwriting may take longer due to additional checks.
First Charge Bridging Loan
Secured solely against your property, first charge loans apply when no other secured debt exists, such as a mortgage. These loans are often FCA-regulated, offering borrower protection but less flexibility. Rates are typically lower than for second charge loans.
Second Charge Bridging Loan
Secured against properties with an existing mortgage, second charge loans often need first charge lender consent, although equitable charges can bypass this. Rates are generally higher than first charge loans but may still be cost-effective if the first loan has favourable terms.
Regulated Bridging Loans
These loans, secured on your home, are FCA-regulated and provide enhanced consumer protection. They are typically limited to 75% of the property’s value.
Unregulated Bridging Loans
Used for investment properties or business purposes, unregulated loans are popular with property investors due to their flexibility.
Commercial Bridging Loans
These loans are secured against commercial properties, offering quick funding for commercial activities. A business finance loan may be a better option depending on the purpose.
How much does a fast bridging loan cost (including interest rates and any set-up fee)?
The average cost of a fast bridging loan is between 5.64-12.2% per annum. The difference in cost is decided by the loan to value, the applicant’s credit history, property type and your plans for the property.
The strongest bridge loan applications will benefit from the lowest costs.
These are applications below 50% LTV with a clear credit history that are secured against residential property.
While bridge loans cost more than a traditional mortgage, which are around 3-5% per annum, they also offer you more opportunities to profit from property.
This can be through grabbing a bargain by completing quickly or adding value through property development or refurbishment.
Do you need a deposit for a bridging loan?
Yes, a deposit is typically required for a bridging loan. Lenders usually offer a maximum loan-to-value (LTV) ratio of 75%, meaning borrowers need to contribute a deposit of 25-40% of the property’s value. The deposit reduces the lender’s risk and ensures the borrower has a financial stake in the project.
The exact deposit amount may vary depending on the property’s type, value, and the borrower’s financial profile. Some lenders may accept additional security, such as another property, instead of a cash deposit, effectively reducing the upfront cash requirement.
A strong deposit can improve loan approval chances and may help secure better interest rates. Borrowers should clarify deposit requirements with their lender during the application process.
Do you need a valuation for a bridging loan?
A valuation for a bridging loan is typically required to determine the value of the property being used as security. Lenders need this to assess the risk and ensure that the loan amount is justified by the property’s worth. Valuations can also help in determining the loan-to-value (LTV) ratio, which affects the terms and interest rates of the loan.
The valuation is usually carried out by a qualified surveyor, and the cost is often borne by the borrower. In some cases, a lender may accept an existing valuation report if it meets their criteria, but this depends on the specific lender and the property type.
If you’re considering a bridging loan, it’s important to confirm the lender’s valuation requirements early on in the process.
How do you compare bridging loans to each other?
To compare fast bridging loans with each other you should consider the total cost of each product, rather than just the interest rate.
This allows you to ensure that you’re getting the best bridging loan deal, rather than being taken in by a low headline fixed interest rate.
Other key factors to compare between different bridging loans are the following:
- Maximum LTV
- Set-up costs and exit fees
- The lender’s application process
- Whether the product has a fixed or variable monthly interest rate
- How quickly the lender can complete your bridging loan application
- Late payment fees, default interest charges and extension fees
- The type of security that the lender requires
- The reputation of the lender
What can you use a bridging loan for?
Property investment is the most common reason for taking out bridging loans. It’s a fast and flexible form of funding whether you’re financing an investment property, a buy-to-let property, or your own home.
If you are an investor, a fast bridging loan allows you to secure a property quickly, access funds promptly, and add value through property refurbishment. When a renovation or refurbishment is complete you can have several options to repay the bridging loan; for example, you could refinance to a longer term form of financing, such as a mortgage, or sell the property and use the revenue generated.
Bridging finance can also be used for the following reasons:
Quick refinancing
You may find yourself in a situation where you need to refinance a property quickly. This could be because you’ve found a better rate, come to the end of your loan or need a stop-gap before you take on a mortgage. Whilst refinancing is often known as remortgaging, it can also apply to the bridging loan market.
Bridging loans can be arranged very quickly, sometimes even on the same day of application, which is much faster than most alternatives.
You can learn more about refinancing bridging loans here.
To buy a property auction
Buying a property at auction is a very common reason for taking bridging finance, the payment terms once a sale has been agreed are usually 28 days and this means that in most cases it can be difficult to arrange a mortgage or traditional loan within the timescale required.
Bridging loans are well suited to auction purposes and in some cases can be arranged in several days taking the worry out of waiting for finance and potentially losing your deposit.
Find out more about purchasing an auction property with a bridging loan here.
Finance an uninhabitable or unmortgageable property
Mortgages providers won’t lend against properties that are uninhabitable and so alternative finance is needed during renovation periods. Bridging loans are much more flexible than mortgages and lenders are prepared to loan against properties that mainstream banks would not consider for a loan.
You can learn more about using bridging finance to purchase an unmortgageable property in our ‘Buying An Unmortgageable Property‘ guide.
To buy a property before selling your existing property
Bridging loans are a key financing tool for those in a property chain allowing applicants to access the necessary funds to complete their property purchase while waiting for the sale of their current home.
This means you don’t lose out on buying the perfect property and can wait until your existing property is sold to pay back the bridging loan. It also allows for a normal property sale rather than rushing a sale through at a reduced value. A quick purchase has the additional benefit of reducing the risk of being gazumped where another, higher, bid is made on the property or even gazundering where a seller suddenly lowers an offer. This is less likely in Scotland where legal documents are exchanged at a much earlier stage in a property sale protecting both the buyer and seller from sudden changes.
A short term loan is also useful when you have sold your home and are waiting to complete the legal paperwork and finalise the sale. In this situation a ‘closed bridging loan’ is used and this is where the borrower can state exactly when the loan will be paid back and be clear about what the exit strategy, or method of repayment, is. Whilst an exit strategy often involves selling a property it can be based on receiving a pension lump sum, a student loan or selling assets.
See our helpful ‘How To Use A Bridging Loan To Buy A New Home Before Selling Your Current One‘ guide to learn more.
To fund a business venture or tax bill
When you need a large amount of money in a short period of time for an investment or to pay a tax bill for His Majesty’s Revenue and Customs (HMRC), a bridging loan is often a good way to get the funds you need. The amount that can be borrowed with a bridging loan can be significant because it is secured against property and so it means that personal credit history is less of an issue.
To buy a below market value property without putting down a deposit
A below market value property is one that is for sale at a discount compared to other similar properties in that area. There are many reasons for properties being sold at a discount, such as: divorce; death, retirement downsizing; repossession and debt. When a property is being sold at a sizeable discount it is usually because the seller would like a quick sale.
Bridging loans are perfect in this scenario owing to their speed.
You can learn more about financing a below market value property here.
To fund a property refurbishment
Bridging loans can be used to fund property refurbishments for residential properties as well as commercial properties. Whilst a bridge loan is usually secured against property it can also be secured against high value assets and be paid off by the sale of shares, assets or from a pension lump sum.
The buy, refurbish, refinance and rent (BRRR)
The Buy, Refurbish, Refinance and Rent (BRRR) method is increasingly popular with investors and covers scenarios such as buying distressed or uninhabitable properties to renovate and rent out. The difference between a traditional refurbishment and a BRRR project is that investors often have several BRRR properties, rather than just one residential property.
Often a BRRR property is bought at auction or is a below market value property where fast financing is required. It is important to note that standards for rental properties vary throughout the UK. In Wales the Renting Homes Act 2022 requires landlords to comply with higher safety standards when renting a property, this includes electrical safety testing and fitting smoke and carbon monoxide detectors.
Bridging loans can help provide the finance required to renovate and refurbish property to the legal standards required throughout the UK. Once the property meets required standards it can then be refinancing to a buy to let mortgage at a lower rate. The property will then be let and the income from tenants will pay a mortgage on the property.
To buy land while undertaking an application for planning permission
Land bridging loans are a type of bridge loan that can be used for the purchase and development of land, either residential or commercial. Often a land bridging loan is sought whilst an investor awaits planning permission.
With a land purchase, a lender will offer up to 80% of the value of the land. If additional funds are required then other assets can be used as security to achieve 100% of the land’s value; this may be another property or piece of land.
What is the eligibility criteria for quick bridging finance?
Bridging loans are available to individuals, partnerships, Limited Liability Partnerships (LLP), Ltd companies, offshore companies, foreign nationals and pension funds.
To be eligible for a bridging loan you will need to be 18 or over and a UK resident. You may also need to provide proof of income, bridging loan lenders in England commonly accept:
- Payslips
- Bank statements
- Tax returns
- Property income (demonstrated through bank statements)
You will need to provide detailed information about the property you intend to use as security, or a clear business plan for land or property development.
Financial history is less of a concern to lenders as compared to a mortgage in England as interest is, in most cases, paid at the end of the loan period and secured on a property.
Bridging loans are unlikely to be offered to those over 85 years old, however, there are other options available if you are looking to secure finance against property. Our friendly team can help guide you through the options, request a free callback for a no obligation quote.
There are many different reasons for securing a fast bridging loan and no one-size fits all, with our range of specialist lenders we can help most people find a loan.
Quick bridging loans usage criteria
Residential, commercial property or land acceptable
Available to individuals, partnerships, LLPs, Ltd companies, offshore companies, foreign nationals and pension funds
Minimum applicant age 18 years – no maximum age
Available in England, Scotland, Wales and Northern Ireland
Adverse credit accepted (on a case by case basis)
We assess all bridging loans on an individual basis
What is an open vs. closed bridging loan?
An open bridging loan has no fixed repayment date, offering flexibility for borrowers uncertain about when they can repay. It is often used when the exact timing of a property sale or refinancing is unknown. However, borrowers must demonstrate a viable exit strategy, such as expected proceeds from a sale or other funds.
In contrast, a closed bridging loan has a predetermined repayment date, usually aligned with a specific event, like the completion of a property sale or a secured mortgage. This type of loan provides certainty for the lender and is typically offered to borrowers with a clear, time-bound exit plan.
Closed bridging loans often have lower interest rates due to reduced risk for lenders, while open loans may come with higher costs and stricter conditions. Borrowers should choose based on their circumstances and repayment certainty.
Are bridging loans a replacement for a mortgage?
Yes, a bridging loan is a replacement for a mortgage in the short term. It is a form of alternative form of funding that is used when a mortgage wouldn’t be available, however, you need to borrow money against a property.
This can be because the property isn’t mortgageable , you need the funds to purchase a new property quickly or you have a short-term financial gap that needs to be filled, for example using a bridging loan for a house purchase before your existing home sells.
Can you turn a bridging loan into a mortgage?
Yes, a bridging loan can be converted into a mortgage, but it requires careful planning ahead of time. To transition, you’ll need to apply for a mortgage well before the bridging loan term ends.
Is a bridging loan more expensive than a mortgage?
Yes, a bridging loan is generally more expensive than a mortgage due to its short-term nature and higher risk to lenders.
Bridging loans typically involve higher fees, such as arrangement fees (1% to 2% of the loan amount) and exit fees, which are less common with standard mortgages. The cost reflects the speed and flexibility of bridging finance, often approved within days for time-sensitive needs like property purchases or renovations.
While more expensive, bridging loans are designed for short-term use, making their higher costs manageable if repaid promptly. Borrowers should compare options carefully and factor in all fees to determine affordability.
What are the alternatives to fast bridging loans?
There are a number of alternatives to bridging loans if you need to raise funds, here are the most common.
Secured loans
A secured loan is ideal for when you want to raise funds on a second charge loan. They are secured against property and usually come with lower interest rates than bridging loans. The amount of the loan will be dependent on how much equity you have in your property.
Property development finance
Property development finance is an alternative to bridging loans for developers who are building property from the ground up.
Commercial mortgages
Commercial mortgages can be used for purchasing commercial property and can be offered with fixed or variable rates. Bridging loans are often used to complete commercial property transactions quickly, before refinance to a commercial mortgage.
Savings or family loans
While this may be fine for a smaller purchase, such as buying cars or repaying credit cards, it is often less appropriate for funding large purchases such as a residential or commercial property. Additionally, if your circumstances change and you are unable to pay back the loan this may fracture your relationship.
Personal Loan
Personal loans can be used to raise smaller amounts, but aren’t suitable when looking to borrow larger sums of money from lenders (or even much over a max of £20k). Personal loans usually have little to no lender arrangement fees and are unsecured, while bridging loans are a secured form of finance.
Can bridging finance be used for auction purchases?
Yes, bridging loans are often used by property investors and developers for auction purchases. The short duration of the application process and quick access to funds make bridging loans the ideal choice for purchasing property at auction where a fast completion time is key.
When planning to use a bridging loan for this purpose, it is crucial to have a clear exit plan in place, such as refinancing or the resale of the property, to repay the loan within the agreed term.
Consulting with a credit broker or bridging loan broker can provide valuable tips and guidance to ensure that the financing meets the requirements of your auction purchase.
Bridging loans for an auction purchase is known as auction finance.
What are the advantages of fast bridging loans?
The advantages of a bridging loan are:
Bridging finance is fast
They can be arranged very quickly; you can get a bridging loan in 5 days-2 weeks. Some even complete on the day of application, far faster than most alternatives to bridging loans.
The costs are falling
The bridge loan market is currently in a price war. Rates realistically start from 0.47%, with 0.43% available for select applications. The main drawback has historically been cost, although this is now becoming an advantage.
Bridging loans are flexible
A bridging loan is far more flexible than mortgages and secured property loans.
No monthly payments
Where your bridging finance interest is rolled up or deducted, there are no monthly payments to make. This can be a major help to cash flow during a property refurbishment or marketing period.
A Bridging loan allows lending against unmortgageable properties
Bridging loans can be used to buy a property that you would otherwise be unable to borrow against.
What are the disadvantages of fast bridging loans?
The disadvantages of bridging finance are:
Bridging loans add cost to a property transaction
No matter how cheap your loan is, it will still cost something. This will add a cost to your property transaction that must be considered. This is true of all loans, not just bridging loans.
Bridging loan fees and charges
Comparing quotes from bridging loan lenders or brokers can be difficult. On top of the lender arrangement fee and interest payments, some lenders will charge additional ‘fund management’, ‘application’, ‘inspection’ or other fees. These can add up and mean that the lowest rate isn’t always the best option. When comparing bridging loans, you must consider all the costs to calculate the total cost rather than just the headline figures. As a leading bridging loan broker, we’ll happily assess this for you.
Bridge loans require an exit route
If you have problems with your method of repaying the loan, this can cause major issues as the end of the bridging loan approaches. If you are unable to repay the loan at the end of the term, you will have to refinance or pay the interest charges monthly. Although there is no guarantee your lender would allow you to do either, failure to do so can put your property and credit score at serious risk. Bridging finance is a short term finance solution, so it’s important that you pay back on time, or risk losing your property.
What paperwork do you need to get a bridging loan?
To apply for a bridging loan you will need to be 18 or over and a UK resident. You will also need to provide proof of income, bridging loan lenders in England commonly accept:
- Payslips
- Bank statements
- Tax returns
- Property income (demonstrated through bank statements)
You will need to provide detailed information about the property you intend to use as security, or a clear business plan for land or property development.
Financial history is less of a concern to lenders as compared to a mortgage in England as interest is, in most cases, paid at the end of the loan period and secured on a property.
How do you apply for a quick bridging loan?
You can approach lenders individually or use a broker, such as ABC Finance to match you with the right lender for your circumstances. Here we explain the process and how to apply step by step:
1. The enquiry stage
This is where you investigate options. You can approach lenders individually or use a broker, such as ABC Finance to match you with the right lender for your circumstances. Whichever option you choose, you should not be charged for your initial enquiry. ABC will never charge for an enquiry.
With ABC fill in a simple form, and one of our friendly experts will call you back. During the call we will discuss your needs, your budget, inform you about the options available and give you approximate costs.
During the call you will be given a decision in principle (DIP). This confirms how much a lender is likely to give you.
2. Loan acceptance
You select the loan that matches your requirements and the lender is instructed.
3. Valuation
This is where the assets you provide as collateral, usually a property, are valued. This process can often be a desktop valuation; for example, a residential property. If however, your property is of significant value or unique then a survey may be required.
4. Legal process
The legal process is particularly relevant with a bridging loan, as a legal charge is placed upon your property giving the lender an interest in the property during the loan term. You will need to pay for the lender’s solicitor and you may choose to use your own solicitor. Read our ABC guide on using a solicitor for a bridging loan to understand the pros and cons of getting expert advice.
If you are looking to complete quickly then legal work can be instructed at the same time as the valuation.
5. Completion
Funds are transferred directly to you at the final stage of the process.
Need a bridging loan urgently?
When in a time sensitive situation a bridging loan can be the perfect solution, offering speed and flexibility. Our expert team of loan advisors are here to get you the best possible deal in a time efficient manor. If you’d like to speak to a member of our team immediately call us on 01922 620008 or email us at enquiries@abcfinance.co.uk. Alternatively complete on of the forms below and a member of our team will call you back.
How is a fast bridging loan secured?
A bridging loan is secured by the borrower’s property or other valuable assets. The lender places a charge on the asset, meaning they have a legal claim to it in case of default.
The loan can be secured through:
- First Charge: The lender has primary rights over the property if the borrower defaults, typically when there is no other debt secured on the property.
- Second Charge: The lender’s claim is secondary to any existing mortgages or loans, and they are repaid after the primary lender in case of default.
The type of security depends on the borrower’s circumstances and the property’s value. Some lenders may accept multiple properties or assets as cross-collateralization to secure the loan.
Proper valuation of the secured asset is mandatory, and its market value determines the loan-to-value (LTV) ratio. Borrowers must ensure they can meet repayment terms to avoid the risk of losing their collateral.
What are the risks of taking out a bridging loan?
The risks of taking out a bridging loan include:
- High Interest Rates: Bridging loans typically have higher interest rates than traditional mortgages due to the short-term nature and higher risk involved. This can lead to significant repayment costs.
- Short Repayment Terms: Bridging loans are usually due within 12 months. If the borrower cannot repay or secure refinancing in time, they may face penalties or legal action, including asset repossession
- Property Risk: If the loan is secured on property, failure to repay could result in the lender taking possession of the asset.
- Exit Strategy Uncertainty: If the borrower’s exit strategy (e.g., property sale, refinancing) fails or is delayed, they may struggle to repay the loan on time, leading to additional costs or default.
- Over-valuation of Property: If the property securing the loan is over-valued, it may not generate enough funds upon sale to repay the loan, increasing the risk of financial loss.
These risks highlight the importance of careful planning, a clear exit strategy, and thorough research before taking out a bridging loan.
How are bridging loan repayments structured?
Bridging loan repayments in the UK are structured to offer flexibility, accommodating various financial situations and objectives. Repayment methods typically include:
- Monthly Interest Payments: Borrowers pay interest monthly during the loan term, with the principal repaid at the end. This approach requires evidence of income and an affordability assessment.
- Rolled-Up (Deferred) Interest: Interest accrues over the loan term and is paid in full upon loan completion, eliminating monthly payments. This is beneficial when the financed property isn’t generating immediate income.
- Retained Interest: Interest for the entire loan term is deducted from the loan amount upfront, with the borrower receiving the net sum. Both interest and principal are repaid at term’s end.
The most common repayment structure for a bridging loan is rolled-up interest, This option is popular as it eliminates monthly payments, making it ideal for borrowers with no immediate cash flow, such as during property renovations or developments.
The chosen repayment structure should align with the borrower’s exit strategy, such as property sale or refinancing, to ensure timely loan settlement.
The most common repayment method for a bridging loan is through the sale of property. Borrowers typically use the proceeds from selling the property being financed or another asset to repay the loan in full. This is especially prevalent for short-term property purchases, auction acquisitions, or renovations intended for resale.
Alternatively, repayment can be made via refinancing, where the borrower secures a long-term mortgage or another financial product to replace the bridging loan. This method is often used when the property is intended for long-term use rather than sale.
Both options require a clear exit strategy, which lenders evaluate during the application process to ensure the borrower can meet repayment terms
What happens if you can’t repay a bridging loan on time?
If you can’t repay a bridging loan on time, the loan enters default, triggering additional costs such as higher interest rates or penalty fees. The lender may take legal action to recover the debt, which could include repossessing and selling the property or assets used as security.
Borrowers should contact their lender immediately if repayment issues arise, as many lenders may offer temporary solutions like extending the loan term, restructuring payments, or negotiating an alternative exit strategy.
Failure to address the issue swiftly can significantly impact credit ratings and limit access to future borrowing. To avoid default, ensure a robust exit strategy when applying for the loan and communicate proactively with the lender about potential delays.
Why is a bridging loan broker useful?
A bridging loan broker is useful because they have access to a wide range of lenders, including specialist providers not available directly to borrowers. They assess your financial situation, compare options, and negotiate terms, saving you time and ensuring you get the best deal for your needs. Brokers also guide you through the application process, increasing the likelihood of approval and fast funding.
Should you go to a bridging loan lender directly?
You can go to a bridging loan lender directly, but it limits your options to that lender’s terms. A broker can access multiple lenders, compare deals, and find the most suitable option for your needs, potentially saving you time and money.
How do you find the best bridging loan for my needs?
To find the best bridging loan for your needs, consider the following steps:
- Assess Your Needs: Determine the loan amount, repayment term, and security you can offer. Understand whether you need a closed or open bridging loan based on your repayment timeline.
- Compare Lenders: Shop around and compare interest rates, fees, and loan-to-value (LTV) ratios. Some lenders may offer more flexible terms, while others may have lower interest rates.
- Check Terms and Fees: Review all costs, including arrangement, exit, and valuation fees, to ensure there are no hidden charges.
- Evaluate Exit Strategy: Make sure you have a clear exit plan, such as property sale or refinancing, that aligns with the lender’s requirements.
- Seek Professional Advice: Consider consulting a financial advisor or broker who specialises in bridging loans to help you navigate options and secure the best deal.
Can you still get bridging finance if another lender has turned me down?
Yes, it’s possible to get bridging finance after being turned down by another lender. Each lender has unique criteria, so rejection by one doesn’t mean all will decline. Common reasons for refusal include poor credit history, insufficient security, or unsuitable property types. However, some lenders specialize in higher-risk cases or unconventional properties.
To improve your chances, address the reasons for rejection. This might involve offering additional security, a detailed repayment strategy, or working with a specialist broker who can connect you with lenders catering to unique circumstances.
What exit strategies will your lenders accept on bridge loans?
When you’re looking to raise funding on a residential property, commercial property or even land, most lenders will consider various exit strategies (how you plan to pay back the loan).
Common bridging loan exit strategies include:
- Sale of shares
- Sale of the primary property
- Sale of other investments
- Refinance your bridging loan to a longer-term mortgage
- Sale of a secondary property
- Inheritance
Talk to Lee about fast bridging loans financing
If you’d like to find out how ABC Finance can help you finance any type of bridging loan quickly, get in touch with Lee today.
Lee Hemming is a specialist bridging loan advisor at ABC Finance with years of experience arranging the right finance solutions for our customers. Call, email or contact ABC Finance today to learn more.
Frequently asked questions
Why use a broker when taking out bridging?
A good broker will help you to find the best deal on your bridge and can save you a lot of money.
Even the big money comparison sites such as MoneySuperMarket, GoCompare and Moneyfacts pass on enquiries for this type of funding to brokers, such is their importance to the market.
Experience is key when applying for bridging loans.
Are bridging loans risky?
Bridging loans can be risky, however most aren’t. The key is knowing exactly how you will repay the funds, giving yourself sufficient time to repay and making sure you always have a back-up plan available.
This is known as your exit strategy and is something that you should consider before even making an application for a bridging loan.
Will base rate cuts make quick bridging finance cheaper?
When lenders refer to a base rate they are referring to the Bank of England interest rate. Lenders tend to follow the base rate, increasing and decreasing loan interest as the base rate rises and falls.
If the base rate is cut then lenders are likely to lower Annual Percentage Rates (APRs) making borrowing cheaper. Bridging loans often have higher APRs than other loans and so any cut to the base rate will be beneficial in this market.
Not all lenders choose to immediately drop their rates, especially if the base rate reduction is small. As a general rule, however, base rate cuts are beneficial to borrowers.
How much equity do I need in my property for this type of funding?
You will need a minimum of 25% equity in your property, unless you offer the bridging lender additional security over another property, whether residential or commercial.
Loan to value is a key metric when assessing bridging loans and for this reason, deposit, or equity in the security property is key.
Is bridging based on my income and finances?
No, your chosen exit route is more important than your income when it comes to bridging loans, especially when interest is being added to the loan.
This is where bridging loans are different to other types of borrowing such as mortgages, credit cards, overdrafts or secured loans.
Will I qualify for bridging loans if I’m retired and living on pensions?
Yes, bridging loans are often taken by retired borrowers who are looking to downsize while waiting to sell their old home, especially where speed and cash flow is important.
Will I qualify for bridging if I’m self-employed?
Yes, we can offer a bridging loan to self-employed borrowers. Applications from self-employed consumers are common and offered by most lenders.
Can I access bridging loans on land from your lenders?
Yes, many lenders offer a bridging loan on land, although it will be much simpler if planning permission is in place. Some peer-to-peer lenders are stronger in this area.
We work with lenders from across the market to ensure we can offer the greatest access to funding methods for a wide range of customers. Eligibility for our loans can be determined by talking to our team of broker experts.
What are the arrangement fees associated with a bridging loan?
Arrangement fees for bridging loans can vary depending on the bridging loan provider and the specific loan terms. These fees depend on the lending package and are typically calculated as a percentage of the bridging loan amount. Typical arrangement fees are 0.5-2% of the borrowing facility.
A decision must be made about the total cost of loan cost when financing. You could face a facility fee, drawdown fee, admin fee, repayment fees and broker fees. Here, at ABC Finance we offer a great service at low cost, many lenders charge high fees.
Always consult with your bridging loan broker or adviser to get a clear indication of the fees and how they will affect your cash flow and project finances.
How can a bridging loan help with property chain completion?
Bridging loans are a key financing tool for those in a property chain, which allow applicants to access the necessary funds to complete their property purchase while waiting for the sale of their current home.
This ensures that they don’t miss out on your next house or property investment opportunity due to delays with a mortgage provider.
Bridging loan providers typically offer flexible loan terms that can be tailored to fit the specific situation of property chains, reducing risks and facilitating a smooth transaction for buyers and investors alike.
The speed and flexibility of bridging loans allows a fast, hassle-free way to repair a property chain that is at risk of failure.
Which banks offer bridge loans?
The leading bridging loan lenders include Precise, United Trust Bank, LendInvest, Shawbrook, Spring Finance and Together Money.
Can I get a quick bridging loan if I have a bad credit history?
Yes, a bridging loan is generally available for borrowers who have bad credit. This can include defaults, CCJs, mortgage arrears, IVAs, debt management plans and even previous bankruptcy.
As a bridging loan is secured on property a lender will be more interested in the value of the property used as collateral and the exit strategy to repay the loan.
Are bridging loans available nationwide?
Yes, however the regulations around bridging loans can vary slightly between different pages of the United Kingdom.
You can learn more about the intricacies of bridging loans with out helpful guides:
How to get a Bridging Loan in England
How to get a Bridging Loan in Scotland
How to get a Bridging Loan in Wales
How to get a Bridging Loan in Northern Ireland
Can I get a bridging loan fast?
Yes, bridging loans can be arranged in as little as 3 days depending on the amount required. See our timescales table for more information.
Does a bridging loan lender ensure that my consumer rights are safe, like a mortgage, secured loan, remortgage overdraft or credit cards?
Bridging loans up to 75% of a property’s value are regulated by the Financial Conduct Authority. The FCA supports consumers and covers loans in the same way it covers products such as credit cards and other banking products. If poor advice has been given the FCA can help a consumer secure compensation and take action against the seller.
Our bridging loan services
Loans to to purchase or refinance a commercial property quickly.
Quick funding options for properties purchased at auction.
Quick loans to rescue a buying chain or purchase your dream home.
Loans to bridge the gap between buying and selling a house.
Fast financing of £10k to £250m in as little as 3 days.
Loans for purchasing a property to refurbish and sell.
Learn more about bridging finance
Can I Refinance A Bridging Loan
Can You Repay A Bridging Loan Early?
Bridging loan alternatives
Three Things To Consider Before Taking Out A Bridging Loan
The Importance of an Exit Strategy
