What is Bridging Finance?
Bridging finance is a short-term loan typically secured against a property. It is normally used when a traditional finance agreement such as a mortgage is unsuitable whether this is because the property does not meet the traditional requirements of mortgage lenders, the borrower does not meet normal mortgage criteria or because the finance is only required for a short term – between 1 month and 3 years.

What does retained interest mean?
With retained interest calculations, a lender will calculate the estimated interest charges for the term of the loan, add this to the loan advance and then retain the funds to service the interest payments every month until the loan is repaid or the term comes to an end.

What does rolled interest mean?
Interest roll-up is when a lender agrees that the repayment of capital and interest can be deferred for a period, usually until the end of the loan term. In this period, you won’t make any repayments at all. Interest will continue to be added to the loan monthly, weekly or possibly daily. In this situation you should make sure you understand the impact of compound interest, namely you will be paying interest on the interest each time a new interest amount is added.

What does serviced interest mean?
This means that the interest charged on a loan is being repaid monthly rather than being added to the loan. Given the nature of this type of arrangement, lenders will normally want to see evidence that the borrow can afford to make the repayments every month in much the same way as a traditional mortgage.

What is meant by Exit Strategy? 
This refers to a borrower’s plan to repay their loan. Typically, this will be by refinancing on to a longer-term loan agreement, selling the security property (ies) or using other personal funds when they become available such as inheritance. In most cases a lender will want evidence of a borrower’s proposed exit strategy prior to release of funds

What if I have credit issues? Can I still apply for Bridging?
Yes, there are lenders that provide bridging finance for clients who have County Court Judgements, defaults, arrears and also discharged bankruptcies.

What if my property already has a mortgage on this, can I still use this as security?
The bridging loan facilities can be secured as first or second charges, and in some circumstances even third charges, if there is still sufficient equity in the property.

What is classed as a light refurbishment bridge?
Different lenders have different definitions of what constitutes a light refurbishment but broadly speaking, this applies to a project that does not require any structural change to the property or the requirement for planning permission.

What is classed as a heavy refurbishment bridge?
Unlike light refurbishment, a heavy refurbishment will normally involve structural changes to a property and in most cases, planning permission (unless covered under PDRs) will be required

What is a non regulated bridge?
Typically, this is applies to an investment property which you have never live in and have no intention of doing so. This can be a residential property or commercial at in some cases land. This type of loan can be arranged will normally have a maximum term of 24 months but in some cases, up to 36 months.

What is meant by Security?
Security is the term used for whatever land or property the lender secures the Bridging Loan charge against.

What is meant by additional security?
This refers to additional property that is offered to a lender to increase the security and lower the total loan to value (LTV) of a loan which will generally lead to better lending terms being offered to the borrower.

How much can I borrow?
We have extensive bridging finance facilities that can provide bridging loans from £26,000 to £50 million plus.

What can I use bridging for?
We can provide bridging loans for any legal purpose.

How long does it take to get a bridging loan?
We have lenders who will guarantee within 48 hours, expect to pay a higher rate for the privilege. However, typically 2-3 weeks should be expected.

What type of security can be used for a bridging loan?
We have bridging loans that can be secured on residential property, commercial property, building plots and land.

Can I borrow in a corporate entity?
Yes provided that there is sufficient security and the ability to repay the commercial bridging loan.

Are there any upfront fees?
We do not charge any upfront for bridging loans. In the absence of a suitable valuation report, the only costs that may be required up front are valuation fees and in some circumstance lenders legals fees.

What costs are involved with bridging?
For bridging loans there is usually an arrangement fee which is only payable once you have your bridging finance facility. Therefore if you do not receive your bridging loan there are no arrangement fees to pay. We do not charge upfront application fees, however in the absence of a suitable valuation report a valuation fee maybe required. If a suitable valuation report is already available a valuation fee won’t be required. Arrangement fees and also legal costs can usually be added to the bridging loan facility if required

Can I get additional funds after I have completed my bridging loan?
This will be possible provided that the existing bridging loan facility is not in default and there is sufficient equity available to secure the additional borrowing

Can you make capital reductions to a bridging loan?
Yes you can, this will reduce your outstanding bridging finance balance and also reduce your monthly interest charges

Are my details and information kept secure & confidential?
Yes of course. We do not sell or pass any information to other companies for marketing purposes.

What is a closed Bridge?
A closed bridging loan is one that is taken out when there is a guaranteed exit date, or date when the loan will be repaid. An example of a guaranteed exit date would be the date of completion for a property sale having exchanged contracts. When taking out a bridging loan under these circumstances a guaranteed exit date can be provided. This type of bridging loan is obviously less risky to both the lender and the borrower and this is reflected in the lending rates and charges.

What is a open Bridge?
An open bridging loan does not have a guaranteed exit date and therefore a borrower can only indicate to the lender or guess how long the loan will be required. An example of an open bridging loan would be when funds are to be cleared following the sale of a property, but at the time of taking out the loan there are no confirmed buyers. Open bridging loans are a more risky proposition for both the lender, who does not know when to expect repayment of the loan, and also the borrower who does not know how long or how many monthly interest payments he will have to pay.

How is bridging loan interest calculated?

Lenders have different ways of calculating interest. We work with lenders where you have the option of rolling up the interest on the loan.

This means servicing monthly interest is not required.

This can be very attractive for cash flow purposes.

The interest is added to the loan balance every month.

When you pay off the loan the redemption repayment will include accrued interest.

Can I pay the bridging loan off early?
There are no penalties on the bridge loans we offer for paying the loan off early.

Most loans are set up typically for 12 months with a minimum loan term of 1 month. A 12 month term is the maximum period for a regulated loan.

If you pay off your loan after 4 months you will only pay for the loan plus interest for 4 months

How long can I take a bridging loan out for?
Depending on the type of loan. Regulated Maximum is 12 months, Unregulated can be upto 36 months.

Do I need income for a bridging loan?
Not necessarily as the loan will usually be for a specific purpose to plug a short term capital requirement with the release of capital from the sale of an asset being the means of repayment, income requirements do not exist in the same way as they do for mortgages and other loans.

Do I need to make monthly payments on a bridging loan?
No, with almost all bridging loans you will only be required to make a payment when you close off the loan. The interest will be added to the loan each month, so the longer you hold the loan the more interest you will pay

Is there anywhere you cant lend?
We have lenders for all of the UK, Europe and USA.

Can I use bridging to stop repossession?
Yes, if you cannot keep up your repayments on your property and do not want to impair your credit score, you could take out a bridging loan to make your repayments whilst you sell the property and as there are no monthly repayments, income requirements do not exist as they do with a mortgage or secured loan

How much equity is required to obtain a bridging loan?
Depending on the purpose of the loan and the source of the anticipated capital inflow will determine how much equity is required. In almost all instances the maximum Loan To Value (LTV) will be 85%.

Can I get a 100% LTV bridging loan
Yes this is possible if you are having a sufficient discount on the property. As we do have lenders who ignore purchase price and lend to the open market value. However, if this is not the case, then 100% is still possible with extra security.

Will a bridging loan appear on my credit file?
Yes, bridging loans and applications for them will appear on your credit file. Getting a quote from us will not.

What is the difference between a first and second charge bridging loan?
If you do not have finance on a property or are using the bridging loan to purchase the property, the loan will be registered as a First charge at the Land registry. This simply means that if you default, the bridging provider will have the right to sell your property and recoup its money first.

A second charge bridging loan is where there the existing mortgage on the property remains in place and you raise additional finance. This is registered at the Land Registry ranking behind the existing mortgage and is known as a Second Charge .In effect, you will then have two charges registered on your property

Are Bridging loans regulated?
If the loan is secured against a property that you or your family live in, then the loan provider will be regulated by the FCA. Don’t worry as we have sufficient mortgage advisors who can provide advice.

Is my home at risk if I don’t keep up with the repayments?
You do not have to make regular monthly repayments on bridging loans, so there are no repayments to keep up. However, if at the end of the term you cannot repay the loan, the lender could seek to repossess it