Bridging Finance
Bridging Finance is a short-term funding solution designed to bridge the gap between a financial need and the availability of long-term funding. It is commonly used in property transactions where timing is critical, such as purchasing a new property before selling an existing one. Bridging loans are typically secured against property and are structured to be repaid within a defined period, often ranging from a few weeks to twelve months.
It is beneficial for individuals and businesses facing time-sensitive opportunities. It provides rapid access to capital, allowing borrowers to act quickly in competitive markets. The flexibility of this financial tool makes it suitable for a wide range of scenarios, including auction purchases, property refurbishments, and resolving temporary cash flow issues.
Bridging Finance is available in several forms, each tailored to specific needs and circumstances. Understanding the types available helps borrowers select the most appropriate solution.
These loans have a fixed repayment date and are typically used when the exit strategy is clearly defined. For example, when a property sale is already agreed upon and completion is imminent.
Open loans do not have a fixed repayment date but usually require repayment within twelve months. They are suitable when the exit strategy is less certain, such as when waiting for a property to sell.
This type of loan is secured as the primary charge against a property. It takes precedence over other financial obligations and is often used when the borrower owns the property outright or has significant equity.
A lump sum is provided in exchange for a percentage of future sales. This is ideal for businesses with strong card sales but limited access to traditional credit.
Regulated Bridging Finance is governed by a combination of regulatory oversight and industry standards. The regulatory framework ensures transparency, consumer protection, and responsible lending practices.
Pay Now
Most bridging loans are designed to be repaid within six to twelve months. The exact term depends on the borrower’s exit strategy and the lender’s terms.
Yes, Bridging Finance is ideal for auction purchases where completion deadlines are tight. Funds can be arranged quickly to meet the required timeframe.
Unsecured loans are available, especially for working capital and short-term needs. However, interest rates may be higher compared to secured loans.
Regulated loans are for residential properties intended for personal use and are subject to financial oversight. Unregulated loans are for commercial or investment purposes and offer more flexibility
Interest is typically charged monthly and can be paid in advance, rolled up, or serviced throughout the loan term. The structure depends on the agreement with the lender.
Bridging loans are secured against property. The lenders and Bridging Finance brokers will assess the value and equity of the property before approving the loan.
Yes, businesses can use Bridging Finance for commercial property purchases, development projects, or to manage cash flow during transitional periods.