Need property finance fast but not sure if you qualify?
Many property buyers, investors and homeowners find themselves in the same boat. Whether you’ve seen a property at auction, need to stop a chain break or want to grab a time sensitive business opportunity, bridging finance might be the answer.
Let’s look at who can get a bridging loan and what you’ll need to qualify. We’ll cover everything from the basics to practical tips to get you funded.
Bridging Loans: The Lowdown
A bridging loan is a short term financial solution when traditional finance isn’t suitable or quick enough.
These specialist loans are usually 3-24 months duration and are secured against property or land. You’ll need a bigger deposit than a standard mortgage, usually around 20-25%.
The main benefit of bridging finance is speed and flexibility – you can get funded in days.
Interest rates are higher than a standard mortgage but the quick access to funds can be worth it for the right situation. You’ll need a clear exit strategy, which is a repayment plan, usually selling a property or refinancing to a long-term mortgage.
Interest can be structured in different ways.
You can pay monthly or the interest can be added to the loan and paid at the end with the principal amount. This flexibility is useful when you expect future funds from a property sale or business transaction.
Main Types of Borrowers Who Can Get Bridging Finance
Bridging finance serves different borrower types, each with different needs and circumstances.
Lenders are incredibly flexible and there are few types of borrowers that they won’t lend to.
Property developers use these loans for quick turnaround projects or auction purchases. You don’t need decades of experience – what matters is having a solid plan for the property and a clear path to repayment.
Private homeowners may need bridging finance when they’ve found their next home but haven’t sold their current property. These loans stop chain breaks and secure new properties while waiting for existing home sales. When using bridging finance for your main residence the loan falls under FCA regulation so you get additional consumer protection.
Business owners need quick access to funds for stock purchases, expansion or to manage cash flow gaps. The key here is having suitable assets for security and a viable plan for repayment.
Limited companies and offshore entities can get bridging finance but additional criteria applies. Company structures may need to provide personal guarantees or meet specific financial requirements.
Key Eligibility Criteria for Bridging Finance
Let’s look at what lenders consider when assessing applications.
Property Requirements
Most lenders accept residential properties, commercial buildings and land as security.
They’ll assess the property’s current market value, location (preferably mainland UK) and overall condition. Unlike traditional mortgage providers bridging lenders will consider properties that need renovation or don’t have standard facilities.
They will also lend on uninhabitable properties, but will only offer low LTV percentages.
Read more: What Properties Can A Bridging Loan Be Secured Against?
Financial Requirements
Traditional lenders focus on income and affordability, bridging lenders focus on how you will pay them back!
They’ll want to see evidence you can repay the loan, either through property sale or refinancing. You’ll need a big deposit and if you’re paying monthly interest you’ll need to prove you can afford it.
Credit history matters but isn’t always the deciding factor. Lenders will work with borrowers who have less than perfect credit scores if other parts of the application are strong.
As with mortgages, there are lenders that are more tolerant of bad credit, and we have access to non-status bridging loans that don’t require credit checks.
Related reading: Successful strategies for repaying a bridging loan
Legal Requirements
Basic legal requirements are being over 18, having the right to own UK property and providing ID that passes money laundering checks.
Business borrowers need to show company registration details. Regulated loans (secured against your home) have additional FCA mandated checks.
Get access to expert brokers and specialist bridging lenders
Common Uses and Their Impact on Eligibility
Your loan purpose affects the likelihood of approval.
Chain breaks are often considered favourably because the exit strategy – selling your existing property – is straightforward. Auction purchases need quick completion, usually within 28 days so specialist lenders will provide pre-auction decisions.
For business purposes lenders will look at your business plan, repayment projections and relevant experience. They want to understand how the funds will generate returns to repay the loan.
How to Improve Your Chances of Approval
Start by developing a clear exit strategy.
Document exactly how you’ll repay the loan through property sale, refinancing or other means. Gather all the necessary documentation, ID, property details, valuations and financial projections.
Working with an experienced broker will help you find the right lenders and structure your application. Some lenders are more risk adverse than others. Some are happier to grant higher LTV loans for an increase in the interest rate.
Common Application Problems
Applications often struggle with unclear exit strategy, insufficient security or unexplained credit issues.
Some borrowers provide incomplete documentation or unrealistic project timelines. Knowing what to look out for will help you address these issues early.
Application Process
The application goes through several stages: initial assessment, documentation submission, property valuation, legal work and completion.
Most applications complete within 1-3 weeks, sometimes quicker with prepared documentation and experienced advisers.
The lenders that offer these loans know that they need to move quickly, it’s a competitive market that is known for speed of funding.
But there are also valuers and solicitors involved, which can cause delays.
Changing how some of these aspects are handled can improve your timeframe if speed is paramount. Discuss this with your broker and they will be able to structure it accordingly.
Read more: How to Get a Bridging Loan
Ready to chat?
If you would like to discuss your options please call us on 0330 030 5050. We will get you matched with an expert bridging loan broker.
Frequently Asked Questions
Most lenders ask for 20-25% of the property value. The exact amount depends on your circumstances and the property type. Higher deposits can lead to better interest rates.
Read more: Do you need a deposit for a bridging loan?
While a good credit score helps, it’s not always essential. Lenders focus more on your property’s value and exit strategy. Past credit issues need explaining, but they’re not automatically disqualifying.
Related reading: Can you get a bridging loan with bad credit?
Yes, there’s no requirement for you to own a property or previously had a mortgage.
Read more: Can You Get a Bridging Loan Without an Existing Mortgage?
From application to funds, the process can take as little as 3-5 days.
Most loans will take 5-10 days to arrange.
Read more: How quickly can you get a bridging loan?
Yes. Self-employed status isn’t a barrier. Lenders care more about your property’s value and exit strategy than employment status.
Yes, you’ll need a solicitor for the legal work. They handle property searches, title checks, and loan documentation. Some lenders have preferred solicitor panels.
Yes. Age isn’t typically a barrier if you have adequate security and a clear exit strategy. Lenders will want to understand how you’ll repay the loan.
Yes, limited companies commonly use bridging finance. Directors will need to provide personal guarantees, and the company should have a clear business purpose for the loan.
This depends on the property type, condition and location.
Standard residential houses in good condition will often only need a simple desktop valuation or an AVM (Automated Valuation Model).
There are lenders that use AVM valuations upto 70% LTV where the value is received back on the same day that you apply.
More complex cases require a physical visit and valuation by a surveyor appointed by the lender. This may take 1-2 weeks depending on the valuer’s capacity.
