Bridging / Refurb loans
Call or email for an initial chat
Bridging and development finance experts
BTL and commercial mortgages
30 years' experience in banking and finance
Access to 150+ lenders
What are bridging / refurb loans?
How does a bridging loan work?
-
Bridging is short-term, flexible finance used when other finance is not available.
-
It’s often used by property investors and developers to buy a property before refurbishing or converting it.
-
Bridging is also used when speed is important, such as an auction purchase with a 28-day completion period.
-
Bridging is often used when an investor is applying for planning consent, before refinancing into a full development finance facility.
-
Regulated and unregulated bridging loans are available (so you can use your home as security for a bridging loan).
-
Bridging loan term is usually 6–18 months.
-
Funds are usually drawn in a single tranche, though staged drawdowns are also possible for longer refurbs.
-
Interest can be retained/rolled into the loan, or can be serviced and paid each month.
-
A clear exit plan is crucial with bridging – how will the loan be repaid? Usually via a sale of the property or a refinance into a term loan or mortgage.
-
Auction loans are a form of bridging loan that allows you to arrange the funding you you need before the auction, so you can bid with confidence.
-
If you win the auction, you will need to pay a 10% deposit on the day. At this point you have exchanged contracts.
-
With traditional auctions, the balance of the purchase price usually needs to be paid within 28 days.
-
Modern auctions sometimes have a 56-day completion period.
-
Approval from lenders before the auction is usually conditional, and subject to valuation and full underwriting.
-
28 days is tight for completing an auction purchase with an auction bridging loan. It's important to work with bridging lenders (and brokers!) who are experienced and comfortable with a fast legal process.
Featured case study: Manufacturing
A fast-growing design and manufacturing company reached out to ask us for help with sourcing £150,000 they needed to fulfil new orders.
The company had impressive revenues, but because the director of the business had multiple liquidated companies, a lot of lenders were not happy to review the business. However, we spent time getting to know the business and created an attractive proposal focusing on the current business and planned progression, before presenting it to carefully selected lenders.
We’re pleased to say that in just under a week, we managed to secure a £150,000 unsecured loan allowing the client to fulfil their new contracts and continue to grow. The client was over the moon!
