Regulated Bridging Loans

Get the best short-term finance deal with ABC Finance and pay no broker fee.

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What is a regulated bridging loan?

A regulated bridging loan is flexible short-term lending secured against property. Bridging loans are designed to bridge the gap between two events, often raising funds to purchase a property and securing long-term finance.

If the loan is secured against a property that is, or will be, the applicant’s main residence, or lived in by an immediate family member, the loan is FCA regulated.

The term ‘regulated’ refers to the protection from the Financial Conduct Authority (FCA). The FCA regulates the financial services industry, and one of its roles is to protect the consumer.

If you require regulated residential bridging finance, you must ensure that your chosen bridging loan broker and lender can offer this sort of funding.

Regulated vs unregulated bridging loans

Bridging loans can be either regulated or unregulated. The two categories are:

Regulated bridging loans – These products are used by applicants who are borrowing against the property that they live in.

Unregulated finance – These unregulated bridging loans are often favoured by property investors, landlords, unregulated bridging intermediaries and property developers. They are used to borrow money against an investment property or land, including property developments, land and buy-to-let properties.

Key product features

Key Features

Max LTV

Up to 75%

Interest rate

From 0.55% per month

Charge types

1^st & 2^nd charge bridging loans

Term

1-12 months loan terms

Interest type

Added to the loan, deducted or serviced

Completion timescale

5 days – 3 weeks – speed is our speciality

Criteria

Residential, commercial property or land acceptable

Minimum applicant age 18 years – no maximum age for bridging

Available in England, Scotland, Wales and Northern Ireland – specialist London loans available

Adverse credit accepted (on a case by case basis)

Loans from £10,000 with no maximum loan size

Why choose ABC Finance?

At ABC Finance, we offer market leading interest rates and fees thanks to our whole of market approach.

We are an FCA-regulated broker, established in 2000, and have won countless awards for our bridging offering, making us the obvious choice in the UK.

We offer instant approval in principle and don’t charge broker fees for loans over £100,000.

We can offer the following:

Any loan amount from £10,000 with no maximum loan size.
Loan term from 1 month to 12 months (extended loan terms to 60 months for high net worth individuals – net £300k+ income or £3m+ assets)
Interest rates from 0.55% per month
Up to 75% loan to value or 100% with additional security / collateral
Very fast service, complete in as little as 1 week
Desktop valuation with no physical inspection required in some cases, depending on LTV
Bad credit history or low credit score accepted- including defaults, CCJs, arrears, IVA or bankruptcy
Low costs, strong experience and access to the whole market
Instant approval, agreement in principle in 1 hour, and same day apply

What can I borrow money for?

We can raise bridging loan funds for almost any purpose, including:

Purchase a property
Finance a property chain break
Repay an existing mortgage while selling a property
Auction purchases
Finance an investment property purchase
Short-term funding for investment properties
Finance for planning permission
Refurbishment or renovation including decoration, new kitchen, bathroom or house conversion or extension.
Capital raising for investment purposes
Refinancing an existing short-term loan

Some common of the more common uses of bridging are:

To prevent repossession – If you’re facing repossession, bridging loans can be used to refinance your home before either remortgaging to a new deal, or selling the property. This approach is often used by people who plan to sell want to ensure they achieve the full market value on sale.
Funding care fees – when moving into a care home, many providers require several months fees upfront. This can be out of reach for many and can mean moving to a less desirable care home. Bridging loans can be used to release equity for the fees, giving you a greater choice of homes.
To repair a chain break – Bridging loans are often used as a form of chain break finance to secure a loan quickly, borrowing against both your existing residential property and the new one. Regulated loans are perfect to purchase a property before selling your existing one.
To complete a fast property purchase – If you’ve purchased a property and need to raise funds quickly, for example, if you’ve been let down by your mortgage lender, or you’ve purchased a property at auction and a traditional mortgage would take too long to complete. In this case, you would use auction finance, which is one of the common bridging types.
You’re purchasing a property that needs refurbishment – Bridging finance is often used to renovate property before refinancing it to a longer-term regulated loan, or selling it. This is known as property refurbishment finance.

What property can I use as security for the loan?

We accept almost any security property for bridging loans, including:

Houses
Flats
Maisonettes
Semi-commercial
Barns
Unmortgageable properties
Other types of property assets

Will my regulated bridging application be approved with ABC Finance?

Yes, we can get a regulated application approved for most borrowers.

As long as you’re a homeowner, or are purchasing a property, offer suitable security, a strong exit strategy to repay the capital and sufficient equity, you will qualify.

We can offer bridging loans even if you have bad credit or a low credit score, we can help.

How much does FCA regulated bridging cost?

Bridging loans regulated by the FCA cost between £550 to £850 per month per £100,000 borrowed, for the average borrower.

This equals an interest rate of 0.55-0.85% per month for most bridging loans. Commercial property applications can cost slightly more, depending on the type of collateral offered.

On top of the interest charged on bridging loans, you can expect to pay an arrangement fee, which is usually 1-2% of the amount borrowed and is usually added to the loan.

On most bridging loans, there is no monthly repayment to make, as interest can be added to the loan and repaid at the end when your exit strategy comes to fruition.

Most borrowers choose retained interest. This is usually decided upfront, when you make your finance application to the lender.

Read more – Bridging loan interest rates

What information do you require when I apply?

When you apply, you must provide the following to the bridging loan lender:

A bridging application form (which is usually completed online)
Evidence of income and any other earnings (such as income from buy-to-let or other investments)
3 months’ statements
ID such as a passport copy or driving licence
Details of your chosen exit strategy, such as sale of the security property, refinance to a new mortgage or another financial product such as development finance

If you are unable to provide certain information, please let us know upfront, and we’ll do our best to work around the issue and may still have bridging loans or other options to suit you.

Try our – bridging loan calculator.

Frequently asked questions

Is there a set criteria for bridging finance?

Not at all. We have a number of loan options from bridging lenders, each with different criteria; some are more flexible, and can be underwritten on a case by case basis depending on the customers circumstances and the required repayment terms.

Do you require proof of income?

This depends on the overall situation; however, most regulated loans do need proof.

If the exit plan is to refinance the property onto a mortgage or mortgages, proof of income will likely be needed to demonstrate that this is feasible.

This can include documents such as payslips, tax returns or an accountant’s reference.

Do I need a solicitor?

You all bridging loans require legal representation. Some lenders offer dual-representation whereby their solicitor acts for both of you.

We are able to recommend solicitors should you require a specialist bridging solicitor.

Where do you lend?

We provide regulated bridging finance across the UK, including England, Wales and Scotland.

Can they be used to consolidate other debts?

Yes, bridging loans can be used by borrowers to repay other debts, including business finance, a remortgage, second mortgage, secured loan, business loan, mezzanine finance, credit cards or personal loan/multiple personal loans.

How do they compare to mortgages?

Mortgages are a long-term loan product that comes with monthly payments, whereas bridging loans are short-term property loans with no repayments.

In addition to the loan term and monthly payment, interest rates and APR tend to be lower on mortgages, due to the longer term and lower risk to lenders.

Finally, mortgages tend to require a lower deposit and offer a higher loan to value (LTV).

Ultimately, they are different products to meet different needs, each with its own benefits and drawbacks.

If you’re unsure which is a better fit for you, get in touch and talk to an expert. We can offer everything from basic advice to support with a full bridging loan application.