Bridging Finance Broker

Personal Bridging Loans

These can cover a cash-flow gap or access liquidity.

Business Bridging Loans

One of the fastest, most accessible, and most flexible financing tools available for companies. There is typically no maximum amount you can borrow.

Commercial Bridging Loans

These are a means of financing for businesses seeking short-term liquidity. Typical use cases include funding urgent big-ticket purchases or investments, such as working capital or property.

Residential Bridging Loans

These are a type of short-term borrowing secured against property. They can be used for various purposes such as purchase, refinance, property development, or to unlock working capital.

Auction Bridging Finance

Offers more flexibility in using the loan capital; you can only use auction-bridging finance to buy property or land at auction.

Land Bridging Finance

This is where your lender will use the land you want to buy – which usually has development or commercial potential – as security for the loan.

Bridge Buy To Let Loans

Used when you want to buy a property (residential, commercial or mixed-use) that you will go on to rent out.

Self Build Bridging Finance

A perfect financing option if you plan to build your own home.

Interest rates are generally higher than standard mortgages because of their short-term nature. The rates depend on factors such as purpose, size, jurisdiction, and risk. Consult a broker today to secure the best interest rate.

Bridging loans can be arranged in as little as 24 hours, depending on application complexity, documentation, credit rating, exit rating and other contributing factors.

Yes, you usually need a deposit for a bridging loan, but it depends on the lender and the circumstances of the loan. The deposit amount and collateral will be taken into account. You can use collateral instead of a cash deposit if you offer assets like property, vehicles, or valuables as security. The collateral's value usually needs to be at least as much as the loan.

Interest rates vary depending on the loan type, security offered, and the borrower's plans. Speak to a broker today to see the best terms for your unique circumstances.

As bridging finance has become more mainstream, more lenders have moved into the high-value and large loan space. You will find that the current market has lenders that offer very considerable loans.

Ultimately, how much you can borrow will depend on the property you use as security and your plans for repayment. In general, around 70-75% LTV is the maximum lenders will offer; however some players may be able to offer a little more. Some lenders offer considerably less than this, depending on your background, the property and other elements of the deal. The more complex the loan, or the more risk there is for lenders, the less you will be able to borrow. To secure the best LTV possible, having solid plans in place for using and repaying the loan, as well as having a good financial background is paramount. The stronger your overall financial position, the more you are likely to be able to borrow.

Certain lenders may offer multi-asset lending. This means that, for example, you could secure a loan against two houses in your portfolio, which can maximise what you are able to borrow.

Bridging finance originated as a way to enable sellers to fund a new property purchase before they had sold their current property, usually their main residence – literally ‘bridging the gap’.

Over time, both lenders and borrowers realised how much flexibility bridging finance offers. While bridging finance is still used to fund the purchase of a new house before a property has sold, it is also regularly used in other scenarios. The most common of these is equity release.

In this scenario, a lender will secure a short-term loan against the equity in your property. You can use equity release in various situations. For example, you may want to use equity release for investing purposes, such as buying shares, purchasing a company, or expanding a current company. It can also be used for buying a new property or consolidating debt. Equity release has a whole range of uses which makes it valuable for borrowers in situations where you need capital quickly.

Broadly speaking, there are two ways to go about securing a bridging loan:

You can approach lenders directly by yourself in the same way you can approach lenders if you want to get a mortgage. If your situation is straightforward or you are not intending to borrow a significant amount this can be a good option. Approaching lenders directly can be a good option if you have a relatively ‘plain vanilla’ scenario and you can benefit from an off-the-shelf bridging finance package.

Alternatively, you can go through a trusted broker such as Enness. This option is best if you need to borrow a significant amount of money, if you have a non-standard scenario (you want to use structures, you are a non-UK resident or international borrower), the property is held in an unusual way and so on. Working with a broker is often the best path forward if you need a high-value bridging loan or if you want to secure finance on an international property. Most lenders will regard this as a non-standard scenario, and may not be able to offer finance. Enness is used to working in high-value, international and unusual deals and knows which lenders will offer the most competitive package.

Many large lenders have pre-packaged one-size-fits-all products which may not work for your situation, therefore using a broker is also the best option if you need a more tailored loan for any reason. You may need a bespoke loan if, for example, you want to repay the loan through ‘unusual’ means such as though a divorce settlement, sale of a business, and so on.

Bridging loans are often structured so that the interest rate is a percentage of the loan amount, calculated on a monthly basis. For example, 0.45%, 1% or 2% per month.

There are three ways to pay the interest rate:

Retained Interest

Your interest payments are deducted from the gross loan amount and are used to meet the interest costs as they accrue - i.e. you pre-pay the interest on the loan.

Rolled Up Interest

Instead of paying a monthly interest payment, interest is added to the outstanding capital (calculated on a monthly basis), and you pay it all back when the loan is repaid.

Serviced Interest

You will need to meet the interest cost monthly as you would with a traditional mortgage

How you pay interest will affect the total cost of your loan, your cash flow and how much you will be able to borrow. Depending on your situation, Enness will talk you through what kind of interest structure will work best for you and will seek out your preferred option from lenders to ensure you are in the best possible position.

Open and closed bridging finance refers to when and how you will pay back your bridging loan.

If you have a clear plan on how you will pay back your bridging loan (i.e., you know you will have capital by certain date, and you’ll use it to pay back the lender) this is a closed bridging loan. Typically, you’ll have a closed bridging loan if you need funds to tide you over until you receive capital that will come to you at a future date - a bonus, the sale of assets or inheritance being paid out, for example.

An open bridging loan is used if you are less sure of when you will receive the funds to pay back what you’ve borrowed. Typically, this will be when you are waiting on the completion of a property sale to be able to pay back your lender, or a similar scenario.

Regardless of whether you will opt for an open or closed deal, it’s critical to have a solid plan in place for the exit of your loan. First and foremost, lenders will want to know exactly how you plan to pay back the loan, but it will also be important for your own peace of mind and feeling secure with your options and choices.

Enness will help you understand the risks and advantages of open and closed bridging loans. Your bridging finance broker will help you pull together a game plan for your exit and present it to the lender in the most compelling way.

Auctions are ideal places to pick up property bargains or buy undervalued property. Bidding happens quickly, but don’t be deceived by the speed things move at: to be in the best position, you’ll have laid the groundwork for auction finance well before the hammer comes down.

If you are planning to buy a property at auction, auction finance is the perfect alternative to buying in cash. Auction finance will allow you to get access to capital quickly, which is useful if you want to snap up an investment property. These loans are also a great solution if you fall in love with a property that’s being auctioned, and you want to buy it despite your capital being tied up in other real estate and assets.

Generally, at auctions, you’ll need to have cash available to put down for the deposit on the day of the auction and have funds available to buy your property within the following three weeks.

Involving Enness well before the auction will make this kind of property purchase as easy and straightforward as possible. Your bridging finance broker will start by getting you an in-principle bridging finance agreement ahead of the auction. Armed with this information, you’ll be well-positioned to make the right bid, based on what you know you can borrow and what you can afford.

Auction finance will usually be readily available to you regardless of whether you are a seasoned or first-time developer. Whatever your experience, Enness will be able to negotiate an attractive package tailored to you. Lenders typically require more collateral for first-time developers, so you’ll want to bear this in mind if you haven’t bought at auction or developed a property before.

Auctions can be exciting, particularly if it’s your first time bidding, it’s easy to get swept up in plans and ideas. Always on your side, Enness will also act as a sounding board, listening to your ambitions, goals and hopes for your future property. Your broker will help you understand what kind of auction finance you can expect and you’ll be able to make sure what you can borrow matches your plans for the property. This way, you can decide if you need to reign your plans in a little or find out if you have the financial flexibility to do a little bit more.

Bridging finance is commonly used when you need capital in order to build or redevelop a property. For example, you may need credit to build or develop a property for commercial use. Alternatively, you might want to construct or renovate your own home or an investment property. You can also use a bridging loan if you have borrowed capital from several lenders to fund work on a property you have already started developing and later plan to sell. In this case, you can pay off multiple lenders and effectively centralise your borrowing, making it easier to manage. Bridging finance for property development is known for being particularly flexible, and the scenarios in which it can be used are very broad.

Bridging finance originated in the UK, and it’s here that bridging is most common. If you are buying a property in the UK and the property you want to secure bridging finance against is also in the UK, you will have the most options and flexibility.

That said, options do exist if you want to purchase property in other countries, or if you want to secure a bridging loan on an international property or transaction.

UK lenders want to retain their highly competitive position in the international bridging market. As a result, you will find it is relatively straightforward to borrow as a foreign national, secure a bridging loan against an international property or use bridging finance in order to buy abroad.

There are bridging lenders outside the UK, although there tends to be far less choice, especially at the top end of the market. Your circumstances and the location of the property you want to secure the loan against will also influence how much, and sometimes if, a lender will let you borrow.

Regulations and rules surrounding bridging loans vary internationally, and you’ll need to bear in mind that what is usual in the UK may well be different elsewhere. The Enness team will work carefully alongside you to help you understand what you’ll need to consider if you’re not based in the UK, or if you want a bridging loan for an international property.

From negotiating a deal for you to helping you plan for elements like foreign exchange risk and where to seek legal advice, Enness will be with you every step of the way to ensure your transaction is swift, easy and hassle-free.

Most lenders are comfortable lending to first-time property developers, although the more experience you have, the more options will be available to you. If you are less experienced, lenders will certainly consider you, but are unlikely to offer as high a loan-to-value ratio as will be available to more practiced developers.

These loans are always negotiated on a case-by-case basis. Whatever kind of project you need property finance for, expect lenders to carefully examine at your plans, such as whether you plant to sell or rent the property, or if it will be your primary or secondary residence. They will also consider the development costs, location and total value of the property.

Enness has access to all the leading lenders in this specialist area of the market. Enness will also be able to help if you need a financing solution to a cashflow or capital problem that’s arisen during your development.

Your bridging finance broker will ensure you have the funds you need, when you need them and be able to secure you the best deal available on the market.

The UK’s bridging market is highly competitive, and for anyone needing a straightforward and relatively affordable loan, there is an abundance of lenders to choose from.

If your circumstances are more complex, or if you need a large bridging loan (£3 million or above), you’ll find it hard to get the best deal by approaching lenders directly. This type of loan is fast-moving, complex and lots of different parts need to come together at the same time, which can be magnified exponentially for large loans. 

There are fewer lenders in this specialist part of the market, but Enness will be invaluable in getting you the most competitive offer and maximum flexibility. Your bridging finance broker will handle negotiations and ensure your loan is tailored to your situation and meets all of your needs. Once secured, they will keep the deal on track and work with the other parties involved, such as your legal team, the surveyor and your lender, to see the transaction through to completion without any disruptions.

Just because you need a large loan, it doesn’t mean you’ll have to endure a lengthier transaction. Enness will be able to secure offers for large bridging loans as quickly as possible and always within the timeframe you need.

Regulated bridging loans are secured against a property in which you have previously resided, currently live in, or will live in in the future. If you have a property that a family member resides in or will live in in the future, this will also be viewed as a regulated loan.

Regulated bridging loans are overseen by the FCA and as a result, there are rules around affordability. This means that the lender will assess how you will pay the monthly loan repayments. To do this, they will look at your income streams and ensure there is enough of a margin that you can comfortably afford to meet the loan repayment schedule.

Unregulated bridging loans are secured against every other property type, or properties for other uses. Buy-to-let properties, property developments and commercial property, among others, will fall into this category.

Enness covers both sides of the market, and your broker will help you secure whichever type of loan you need regardless of how simple or complex your circumstances, how quickly you need the finance or for what purpose. Enness has access to the largest number of lenders and regularly secures bridging finance for borrowers in all situations, meaning you can rest assured the process of applying, securing and finalising your bridging loan will go as smoothly as possible for all parties. 

You can use a bridge loan to buy a house or another type of residential property. Usually, you'll use this type of finance if you want to buy a new home before your old home has sold, effectively using the loan to 'bridge the gap'. You'll usually then refinance the bridge loan on the property you've bought to a conventional loan like a mortgage, although there are various different ways to exit (pay back) this type of finance. 

You can also use a bridge loan to buy a house if you need to access capital to make afford the purchase but don't want a conventional mortgage. This might be because you're selling a home and you can use the proceeds to pay off the bridging loan in one go, you'll have a liquidity event (like a divorce settlement, inheritance or the sale of a business). 

There are many different reasons why you might want to take out a bridge loan to buy a house and lenders will consider lots of different scenarios, provided you have a solid exit plan, the loan is affordable and you can document why you need a bridge loan to purchase a property. 

Bridging Loans Cost

Compared to more conventional loans like a mortgage, bridging loans can be more expensive in comparison. With bridging loan finance, you will be borrowing a significant sum of money over a relatively short period of time and for a very specific reason, for example to solve a problem, create liquidity quickly or pursue an opportunity. Bridging loans are most commonly used when it’s not possible to use other types of finance and therefore there is a premium to pay for this service. When a bridging loan is used, there is usually a little more risk to the lender and there are also many more aspects for them organise in a very short time, such as approving you for the loan and onboarding you. This is why this type of finance tends to be more expensive than other types of loan.

However, it’s important to understand what ‘expensive’ can mean in the wider context of what you are trying to achieve. Bridging loans cost more than many types of conventional loan, but they will sometimes be the only type of lending you will be able to secure. You may want to break a property chain, create liquidity, buy a new property or generate capital to solve a problem. Bridging is an incredibly flexible type of finance that opens doors for borrowers, and, in many cases, may be the only route to borrowing or creating the liquidity you need. Often, it it worth paying this premium.

Bridging Loans Fees

Bridging finance also typically comes with more fees than conventional types of loan including legal fees, lender fees, valuations, arrangement fees and other costs. Enness can provide you with information on all of the fees you are liable to pay if you take out a bridging loan, and what these are likely to amount to, so that you can get an idea of total costs in addition to rates.

Bridging Loans Risk

When considering borrowers, lenders will look at your plans for repayment and any revenue (salary or otherwise) you have coming in. This will contribute to how confidently they can lend to you. For example, you may be in the process of selling a property or expecting a large settlement or inheritance which will dramatically (and positively) impact your net worth. Often, the liquidity event itself is of less importance to lenders than when you will receive it and how certain it is that you will receive it by a specific date. The more certain you and your lender is about how easily you can repay the loan, the easier it will be to secure finance.

Just as with any loan, bridging finance comes with its own risks. If you don’t repay the loan, you stand to lose your property. Having a secure repayment plan in place and being able to prove you can pay back the loan is imperative.

Speed

The process of getting a mortgage or other types of lending can take at least several weeks and sometimes, months to complete. Lenders will need to review your application, approve you for a loan, onboard you and ensure you meet the necessary regulatory and compliance rules that will allow them to lend. In general, this process can take a least 6-8 weeks, however it may be longer if your circumstances are more complicated.  

Bridging lenders will meet the same regulations (ensuring you meet compliance, AML, credit and onboarding requirements) but despite this, the process moves much faster. As a result, getting a bridging loan is much faster than completing a mortgage, which is essential if you require finance quickly.

Privacy

Not all bridging finance is regulated, and there are lots of smaller, nimble lenders operating in the space. This will speed up how quickly you can secure the loan and there will be a greater degree of privacy – lenders are more focused on the deal, exit and security in question than all the details of your financial background.

Flexibility

Generally, bridging finance lenders are smaller and more flexible than larger lenders that operate in the mainstream lending space. This means decisions are taken quickly and it is easier to get in front of decision makers. Enness usually has personal and close relationships with these bridging loan providers. Your broker will be able to build a loan with lenders based on your financial background and scenario. There is more flexibility, bridging finance lenders make decisions quickly and deals reach completion very fast.

Bridging Loan Rates

Generally speaking, bridging lenders are non-bank lenders, and they are responsible for setting their own rates and fees. While this seems obvious, it can be useful for borrowers because it means bridging lenders are less influenced by increases to the base rate.

Typically, for example, banks pass on interest rate increases directly to borrowers who have a flexible rate – this can happen as soon as a day after the Central Bank raises the rate. Bridging works differently. Lenders will fix rates up front, which means that potential base rate increases during the duration of your loan will not change what you are liable to pay.

Large Loans

You can borrow a significant amount using large bridging loans. Most lenders can lend around £2-5 million (LTV of about 70-75% is usual in a straightforward deal, provided your finances are in good order and you have a significant net worth). However, other lenders will offer significantly more – bridging loans of £10 million plus are becoming more common.

Lenders that operate at the top of the market are usually specialists in large loans, and most are set up to lend large amounts. Often, it will be possible to secure a large bridge loan against a single, amounts against a single high-value property. 

Ease

Some borrowers will decide to opt for bridging finance when they want to secure a loan quickly with as little hassle as possible. Applying for a loan will always require oganisation and an investment of time, but bridging finance is, often, simply faster and less complicated to arrange than other types of finance, like a mortgage. This is because lenders are principally focused on your exit and the asset. As long as you are creditworthy and can demonstrate you have a good plan of action and plan for paying back the loan, bridging can be a less burdensome type of finance to arrange than alternative financing products, which take longer to arrange and require more paperwork and information. Many borrowers, particularly high-net-worth individuals, will happily pay a premium to benefit from lending that is more pragmatic and can be closed as quickly as possible.