bridging finance

Bridging loans

Short term finance secured on property

Bridging finance

What is a Bridging Loan?

A bridging loan is a short term loan, usually secured against property. Used for a variety of situations, typically for speed or to finance an unmortgageable property.

You need Bridging finance to bridge the gap between two points;

Purchase or refinance of a property     &    remortgage or sale of the property

Interest is typically part of the loan which means you won’t have to make interest payments during the term.

Uses for Bridging Loans

There are many uses for bridging finance, we could write blog posts on each of the bridging loans we’ve arranged over the years and never run out of different scenarios.  

The main considerations are how quickly we can arrange your bridging loan and the fact that you do not need to make monthly payments to service the loan (although this can be an option in some situations)

That makes a bridging loan ideal for;

  • Time sensitive purchases ~ less underwriting means a much faster turnaround for an auction or “cash” purchase
  • Refurbishments and conversions ~ so you don’t need to make payments until the property is let or sold
  • Chain-breaking and downsizing ~ don’t miss out on your dream property
  • Business lending ~ utilise your property equity to grow (or save) your business
  • Undervalue purchase ~ lenders will lend on the value rather than purchase price for a true BMV (below market value) purchase

What can a bridging loan be used for?


Time sensitive purchases
Auction purchase and other immediate requirements

Purchasing at auction generally requires a completion within 28 days of the auction date. You’ll have put a deposit down on the day, from then on your funding and legal teams need to work together to ensure completion on the required date.

By using our auction finance specialist panel we can work with funders who will work fast to complete when you need to.

If you are raising funds for a business or other reasons time can still be of the essence – in these situations it’s vital to discuss your needs with our experts so that you can avert a business issue or take advantage of a great opportunity.

Let’s get started!

Refurbishments
Costs and interest rates for bridging loans

Using bridging loans for house purchase or commercial premises needing refurbishment will allow you time to complete works on the property before letting, selling or occupying yourself. As the value is likely to increase following refurbishment a refinance should be possible on the completed value.

Lenders will lend against the purchase price of the property and some will also allow drawdowns against work done in the same way as a development loan.

Contact us now

Property conversion
Finance to convert a property

Conversion can be an effective means to profit from property.  Property developers have long been completing stunning barn conversions, converting office blocks into apartments or smaller shops into housing or flats. 

You’ll need to work with a lender with the flexibility to allow drawdowns when you need them and to fund the purchase and works.

Our panel of specialist property conversion lenders will ensure you get the funding you need, just when you need it.

Project ready?

Chain-breaking & downsizing
Getting the property you want

Long chains in your buying (and selling) process can cause huge problems and anxiety for everyone concerned. Chains are also amongst the most common causes of lost sales.

By using a bridging loan the new property can be purchased before the sale the existing property completes.  Although there is a cost implication this means that you don’t lose your dream home, you are able to take advantage of market opportunties and potentially, by completing quicker, negotiate a lower purchase price.

 

We can help!

Business lending
Funding your business

Bridging finance is used in a number of business situations outside the typical property business.  Being able to arrange finance quickly allows your business to take advantage of opportunities or avert business problems.

Bridging is frequently used for; Stock purchase, equipment and assets, business acquisition, tax or VAT bills and helping out with general cash-flow problems.

Growing the business

Below market value transactions
Undervalue purchase – 100% funding.

Working with lenders who understand the property market will pay dividends for the smart investor.

Having access to property opportunities below the market value of that property is a great way to increase your profits.  Our specialist panel of bridging lenders will lend against the value of the property rather than purchase price allowing funding of up to 100% of the purchase price.

Fund 100% now

Can I get a 100% bridging loan?


100% bridging loans
100% funding using bridging finance 

There are many lenders and brokers out there shouting about their 100% bridging deals.  It is possible to arrange bridging finance at 100% of purchase price in the right circumstances but it does not apply to every transaction.

Apply now

Under Value Purchase
Purchasing Below Market Value

Below Market Value (BMV) transactions can be funded based on the value of the property rather than the purchase price.

There must be a valid difference between the value and the purchase price – the valuer will need to confirm this.

Please discuss with your advisor to check you would be eligible.

Gearing up
Using the equity in other property

Many lenders will take into account equity in the rest of your portfolio or your residential property.  

Lenders will only lend within their standard lending criteria and they will take existing lending off what is available so check your balances and discuss with your Acorn advisor to get the best possible deal.

100% development and refurbishment
100% funding for property development 

For developments and some refurbishment cases, it’s possible to arrange 100% borrowing against the costs of the project.

For more information about development or refurbishment finance, we have a dedicated development finance page. 

Development finance

Bridging loan rates and costs


Interest rates and costs of bridging loans
How much will a bridging loan cost?

With rates starting from as low as 0.44% per month there’s never been a better time to utilise a bridging loan to boost your property enterprise or business.

The range of interest and other costs can vary enormously though, the market is wide and lenders each have their own specialisms.  Lenders have differing policies on adverse credit, property types and your planned repayment route.

Cut through the chatter and find the best interest rate for your circumstances by discussing your needs with an Acorn consultant.

Talk to us now

What is bridging finance?

What is bridging finance?
Pubs, hotels & restaurants without the requisite accounts

Sometimes you find the perfect business but the current owners just are not trading it to give us the proof we need that you can repay a commercial mortgage.

That can be for a number of reasons;

  • The unit is closed
  • The unit is being run by tenants or relief management, meaning that the vendor does not have access to the accounts (this is the case when a pub company is selling)
  • The unit has under-traded, due to the retirement of the owners or ill health
  • It’s a brand new site being developed

Whatever the reason, as long as you can produce a comprehensive business plan (we can help with this) then the funding can be arranged to make the purchase.

Over the years we’ve known customers double the value of outlets by buying at the very bottom of the market and being able to trade them successfully.

The failure of the previous owner does not need to make a pub, hotel or restaurant site unviable, it may mean that they had the wrong business model or were the wrong operators.

If you are the right operator with the right plan – funding will be available.

Apply now


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