What is a Bridging Loan?

A bridging loan is a short-term financial instrument designed to bridge the gap when funds are needed for a purchase, but the availability of funds is pending from the sale of another asset. It is a swift and adaptable solution tailored for various scenarios in the property and development sector.

Key Features of Bridging Finance:

1. Acceptable Security: We accept residential and commercial properties of any type and condition, as well as land with or without planning consent.

2. Quick Completion: Bridging lenders operate with efficiency, providing loans in situations where traditional lenders may hesitate. We understand the importance of a quick completion and strive to meet your timelines.

3. Versatile Usage: Bridging loans can be utilized for various purposes, including:

   • Buying property
   • Property development
   • Investing in buy-to-let opportunities
   • Tax payments

Types of Bridging Loans:

1. Open Bridging Loans: This type offers flexibility with no fixed repayment date, allowing repayment whenever funds become available. However, lenders typically expect the debt to be cleared within one year.

2. Closed Bridging Loans: With a fixed repayment date, usually tied to a specific event like the sale of a property, closed bridging loans are often more cost-effective than open bridging loans due to reduced flexibility.

Understanding ‘First Charge’ and ‘Second Charge’ Bridging Loans:

• First Charge: If there are no existing loans secured on the property, the bridging loan holds the first charge. In case of non-repayment, the lender has priority in receiving repayment from the property sale.

• Second Charge: When there are existing loans (e.g., a mortgage) on the property, the bridging loan becomes a second charge. Repayment follows the first charge lender, making second charge loans slightly more expensive and requiring the consent of the primary lender.

Why Choose UK Commercial and Development Finance for Bridging Solutions?

1. Expertise: Benefit from our in-depth knowledge and experience in the commercial and development finance sector.

2. Tailored Solutions: We understand the unique needs of each project and provide bespoke solutions to meet your specific requirements.

3. Efficient Process: Our streamlined processes ensure a quick and efficient application and approval process, aligning with the urgency often associated with bridging finance.