Service Overview
A bridge loan is a short-term loan used until a person or company secures permanent financing or removes an existing obligation. It allows the user to meet current obligations by providing immediate cash flow. Bridging loans are commonly used in real estate to purchase a new property before selling an existing one, or for property auctions where quick completion is required.
Eligibility Criteria
- Must have a clear "exit strategy" (e.g. sale of property or refinancing).
- Sufficient equity in the property being used as security.
- Property must be in a condition acceptable to the lender.
- Borrower must have a good track record (for commercial bridging).
- Minimum loan amounts usually apply (e.g. £50,000+).
Required Documents
- Proof of ID and Address for all directors/borrowers.
- Details of the property being purchased and the security property.
- Evidence of the exit strategy (e.g. sales particulars or mortgage AIP).
- Assets and Liabilities statement.
- Valuation report for the property (arranged by the lender).
Process / Workflow
- Enquiry: You provide details of the funding requirement and the security property.
- Indicative Terms: The lender provides a "decision in principle" with estimated costs.
- Valuation: A surveyor visits the property to assess its value and condition.
- Legal Work: Solicitors for both the borrower and lender handle the legal charges.
- Drawdown: Funds are released, often within 7-14 days of the initial enquiry.
- Exit: The loan is repaid at the end of the term (typically 6-18 months).
Benefits of the Service
- Speed: Much faster than traditional mortgages, allowing for quick property acquisitions.
- Flexibility: Can be used for properties in poor condition or for complex scenarios.
- Opportunity: Allows you to secure properties at auction or before they hit the open market.
- No Monthly Payments: Interest can often be "rolled up" and paid at the end of the term.