FAQ
Frequently Asked
Questions
Everything you need to know about bridging finance — from the basics to the detail. If your question isn't answered here, get in touch.
Understanding Bridging Finance
What is a bridging loan?
A bridging loan is a short-term, property-secured loan designed to "bridge the gap" between a financial need and a longer-term funding solution. Unlike traditional mortgages which can take weeks or months to arrange, bridging loans are designed for speed — often completing in days rather than weeks. They are typically repaid within 1 to 24 months, either through the sale of the property, refinancing onto a longer-term product, or from other sources of capital. They are secured against property (commercial, residential investment, land, or mixed-use) and the full loan amount plus interest is repaid at the end of the term as a lump sum.
How does a bridging loan work?
The process works in five stages:
- Enquiry & assessment — you tell us about your project and we assess the deal, the property, and the exit strategy.
- Deal structuring — we present your deal to the most appropriate lender(s) from our panel of 250+ in its best format.
- Terms issued — the lender provides a formal offer detailing the rate, fees, term, and conditions.
- Legal & valuation — solicitors are instructed and the property is valued. We manage this entire process.
- Funds released — once legal and valuation are complete, funds are drawn down — typically within 5-14 days of initial enquiry.
Interest can either be "rolled up" (added to the loan and repaid at the end) or "serviced" (paid monthly). Most commercial bridging clients choose rolled-up interest to preserve cash flow during the loan term.
What can a bridging loan be used for?
Common uses include: purchasing property at auction (where you need to complete within 28 days), acquiring commercial or investment property quickly, raising capital against property you already own, funding refurbishment or renovation works, breaking a property chain, buying land with or without planning permission, bridging the gap while development finance is arranged, funding a business need secured against commercial property, and refinancing an existing loan that's expiring. Essentially, any scenario where you need property-backed finance faster than a traditional lender can provide it.
What is the difference between regulated and unregulated bridging?
Regulated bridging is governed by the FCA and applies when the loan is secured against a property that the borrower (or a close family member) will live in as their primary residence. Unregulated bridging applies to everything else — commercial property, investment property, land, and any property that is not the borrower's main home. bridging.fund specialises exclusively in unregulated bridging. This means we can move faster, structure more flexibly, and access a wider range of lenders than firms constrained by FCA regulation.
What are the pros and cons of a bridging loan?
Advantages:
- Speed — completion in as little as 5-14 days, compared to months for a traditional mortgage.
- Flexibility — bridging can fund scenarios that banks simply won't consider, including uninhabitable properties, land without planning, and complex ownership structures.
- No early repayment charges — most bridging loans can be repaid early without penalty, reducing your total cost if you exit sooner than planned.
- Property types — commercial, residential investment, land, mixed-use, HMOs, and properties in poor condition are all eligible.
- Asset-based — lenders focus on the property and exit strategy rather than your income or credit score.
- Immediate capital — unlock equity or complete purchases when timing is critical.
Disadvantages:
- Higher cost — interest rates (typically 0.50-1.5% per month) are higher than long-term mortgages. This is the price of speed and flexibility.
- Secured against property — if you can't repay, the lender can take possession of the secured property.
- Short term — bridging is designed as temporary finance (1-24 months). Extending beyond the agreed term incurs additional costs.
- Fees — arrangement fees, legal costs, and valuation fees add to the total cost of borrowing.
- Exit risk — if your exit strategy fails (sale falls through, refinance declined), you may face default interest or extension charges.
The bottom line: Bridging finance costs more than a mortgage — but it does things a mortgage can't. For time-sensitive deals, complex properties, or situations where speed creates value, the cost is typically a small fraction of the profit or opportunity it unlocks. Use our total cost calculator to see exactly what a bridge would cost for your deal.
Interest & Repayment
What is rolled up interest?
Rolled up interest means the interest on your bridging loan is added to the loan balance during the term and repaid as a single lump sum when the loan is redeemed — typically on sale of the property or refinancing. This means no monthly interest payments during the loan term, preserving your cash flow for the project itself.
For example, on a £500,000 loan at 0.85% per month over 12 months, the interest would be £51,000. Rather than paying £4,250 per month, the full £51,000 is rolled up and repaid alongside the principal at the end of the term.
This is the most common arrangement for commercial bridging loans — and one of the key advantages over traditional bank finance. Most of our clients choose rolled up interest because it means no monthly costs to service during the project.
Do I have to make monthly payments on a bridging loan?
No. The vast majority of bridging loans we arrange have rolled up interest, meaning there are no monthly payments at all. Everything — the principal, interest, and fees — is repaid as one lump sum at the end of the term when you sell the property or refinance.
Some lenders do offer "serviced" interest where you pay interest monthly (similar to a mortgage), which gives a lower total cost if you have the cash flow to support it. We'll explain both options and recommend the structure that works best for your situation.
What is retained interest vs. rolled up interest?
Retained interest is deducted from the loan upfront — the lender holds back the interest for the full term from your day-one advance. For example, on a £500,000 loan with £51,000 retained interest, you'd receive £449,000 on day one. If you repay early, the unused interest is typically refunded.
Rolled up interest is added to the loan balance over time and repaid at the end. You receive the full loan amount (less fees) on day one. Both methods mean no monthly payments — the difference is when the interest is calculated and how it affects your net advance.
Costs & Fees
How much does a bridging loan cost?
The total cost of a bridging loan includes several components:
- Interest rate — typically 0.40% to 1.5% per month, depending on LTV, property type, borrower profile, and exit strategy.
- Arrangement fee — usually 1-2% of the loan amount, charged by the lender to set up the facility.
- Exit fee — some lenders charge 0.5-1% on redemption. Many of our panel lenders offer zero exit fee products.
- Valuation fee — the cost of a professional property valuation, typically £500-£5,000 depending on property value and complexity.
- Legal fees — both your solicitor's fees and the lender's legal costs, typically £2,000-£10,000 depending on deal complexity.
- Broker fee — our fee is typically 1% of the loan amount, confirmed upfront before you commit.
Use our total cost calculator to see a full indicative breakdown for your specific deal. We believe in total transparency — what you see is what you pay.
What determines the interest rate I'll pay?
Several factors influence your rate: the loan-to-value ratio (lower LTV generally means better rates), the type and condition of the property, your experience as a borrower, the strength of your exit strategy, the loan term, and whether the deal is first or second charge. Two loans with the same headline rate can have very different total costs once fees are factored in — which is why we always advise comparing total cost of borrowing, not just the monthly rate.
Can I repay my bridging loan early?
Yes. Most bridging loans can be repaid early, and many lenders on our panel charge no early repayment penalty at all. Some lenders charge a minimum interest period (typically 1-3 months), meaning you'll pay interest for that period even if you repay sooner. We always clarify early repayment terms upfront so there are no surprises.
What does it cost to use a broker?
Our fee is typically 1% of the loan amount, confirmed upfront before you proceed. There are no hidden charges. In many cases, our ability to negotiate better lender terms — lower rates, reduced fees, or more favourable structures — more than offsets our fee. We only get paid on completion, so our interests are fully aligned with yours.
Eligibility & Process
How much can I borrow?
We arrange bridging loans from £250,000 upwards with no upper limit — our largest deal to date is £25 million, and we can structure facilities in excess of £50m or even £100m for the right deal. The amount you can borrow depends primarily on the loan-to-value ratio, which typically ranges from 60-75% depending on the property type, deal complexity, and lender appetite. Cross-charging additional properties can increase the amount available.
What do I need to apply?
To get started, we typically need: details of the property (address, type, value), the loan amount required and purpose, your proposed exit strategy, proof of identity and address, and a brief overview of your property experience. Unlike banks, we don't require detailed business plans, extensive trading history, or months of financial statements. Bridging is asset-based — the property and the exit strategy are what matter most.
Can I get a bridging loan with bad credit?
Yes. Many of our lenders take a common-sense approach to credit history. CCJs, defaults, missed payments, and even previous bankruptcy can be accommodated by the right lender with the right deal. Unlike high street banks, specialist bridging lenders assess each case individually — focusing on the property value and exit strategy rather than relying solely on credit scores. See our less-than-perfect credit page for more detail.
How quickly can you arrange funding?
Our average decision time is 4 hours and average completion is 14 days. In urgent cases, we've completed in as little as 5 working days. The speed depends on the complexity of the deal, the lender, and how quickly legal and valuation can be instructed. For auction purchases, we can have terms agreed before you bid — giving you certainty on the day.
Do I need a personal guarantee?
Not necessarily. While many bridging loans require a personal guarantee from the borrower or director, we have lenders on our panel who offer non-recourse lending — meaning the loan is secured purely against the property with no personal guarantee required. See our no personal guarantees page for more detail.
Do I need an exit strategy?
Yes — every bridging loan needs a clear, credible exit strategy. Common exits include: selling the property, refinancing onto a commercial mortgage or BTL product, completing a development and selling units, or repaying from business income or other capital sources. We help you plan the exit from day one.
What types of property do you finance?
We arrange finance against: commercial property (offices, retail, industrial, warehouses, leisure, healthcare), land with or without planning permission, mixed-use buildings, investment residential property (BTL, HMO, blocks), development sites, and semi-commercial property. We do not arrange regulated loans — meaning we cannot finance a property the borrower lives in as their primary home.
Are you FCA regulated?
We are not FCA regulated because we specialise exclusively in unregulated commercial bridging finance — loans secured against property that is not the borrower's primary residence. This allows us to offer faster, more flexible solutions. If you need a regulated bridging loan (secured against your own home), we can refer you to an appropriate FCA-authorised broker.
Can I get a bridging loan on a property I live in?
Not through us. A bridging loan secured against a property you live in as your main home is classed as a regulated bridging loan and requires an FCA-authorised broker. We specialise exclusively in unregulated commercial bridging — investment property, commercial property, land, and development sites. If you need a regulated bridge, we can refer you to a suitable FCA-authorised firm.
Do you arrange second charge bridging loans?
Yes. We arrange both first and second charge bridging loans. A second charge sits behind your existing mortgage or loan, letting you raise additional capital without refinancing your entire facility. This is particularly useful when you have a competitive first charge rate you don't want to lose, or when speed is critical and a full refinance would take too long. See our second charge bridging page for more detail.
What is the difference between a first and second charge?
A first charge has priority — if the property is sold, the first charge lender is repaid first. A second charge sits behind the first charge and is repaid from whatever remains. Because second charge lenders take more risk, rates are typically higher than first charge. However, the total cost can still be lower than refinancing your entire facility, especially if your existing first charge has a favourable rate or early repayment penalties.
What is a second charge bridging loan?
A second charge bridging loan sits behind an existing mortgage or loan on the same property. It allows you to raise additional capital without disturbing your existing first charge facility. Second charge rates are typically higher than first charge, but it can be the fastest and most cost-effective way to raise capital when you have equity tied up in a property.
What is a mezzanine loan?
Mezzanine finance is a layer of funding that sits between the senior debt (first charge loan) and the borrower's own equity. It allows developers to borrow more than a single lender would typically provide — sometimes up to 85-90% of costs. Mezzanine lenders take higher risk and charge higher rates, but for the right deal it can unlock projects that wouldn't otherwise be viable.
Can you help if I've been turned down elsewhere?
Often, yes. Many of our clients come to us after being declined by other brokers or lenders. The issue is rarely the deal itself — it's how it was presented. We restructure the deal and match it to the right lender from our panel of 250+, including private funds and specialist capital that most brokers can't access.
Critical Questions
What are the downsides of a bridging loan?
The main downsides: bridging is more expensive than a term mortgage (rates from 0.40% per month vs roughly 0.40% per year for a residential mortgage), the term is short so you need a credible exit strategy, and the property is at risk if you can't repay. There are also setup costs — arrangement fee (1–2%), valuation fee, legal fees on both sides, and a broker fee. Bridging is the right tool when speed or flexibility justifies the cost premium; it's the wrong tool when a high-street mortgage would do the job. Anyone telling you bridging is a long-term solution is selling, not advising.
What are the disadvantages of a bridging loan?
The disadvantages of a bridging loan are the same as the downsides — higher rates than a term mortgage, short repayment window, and the property used as security is at risk if your exit doesn't materialise. The fee structure is also more complex than a high-street mortgage, with arrangement, valuation, legal, and broker fees stacking up alongside the interest cost. The flip side is that bridging gets done in days while a mortgage takes weeks or months, and bridging will lend on properties (auction lots, semi-derelict buildings, mixed-use, short-leases) that high-street lenders won't touch. Whether the disadvantages outweigh the advantages depends entirely on your deal.
Is it wise to get a bridging loan?
Bridging is wise when three things are true: you have a credible, time-bound exit strategy (sale, refinance, or completion of a project); the deal economics work even with bridging-level interest costs priced in; and a high-street mortgage either isn't available or can't move fast enough. It's unwise when any of those break — borrowing short-term money against an exit you "hope" will materialise is how borrowers get into trouble. Treat bridging as expensive, fast capital for situations where speed has measurable value, not as a substitute for proper long-term financing. We'll tell you honestly when bridging isn't the right tool — there's no point us arranging a loan that fails.
What does Martin Lewis say about bridging loans?
Martin Lewis and MoneySavingExpert have generally cautioned consumers that bridging loans are expensive specialist finance — appropriate for specific scenarios (chain-break, auction completion, short-term capital) but not a substitute for a regular mortgage. That guidance is correct for the regulated, owner-occupier consumer market that MSE serves. We work in the unregulated commercial and investment market where bridging is a normal, well-understood tool used routinely by property professionals. Different audience, different rules. If you're a homeowner trying to buy your next family home, MSE's caution applies. If you're an investor, developer, or business buying property as an asset, bridging is part of the standard toolkit — used carefully.
Which banks do bridging loans in the UK?
Bridging finance in the UK is provided primarily by specialist non-bank lenders, challenger banks, and private capital funds, rather than the major high-street retail banks — bridging isn't a product the high street typically sells to consumers. There are 100+ active lenders in the UK bridging market with materially different appetites, pricing and turnaround times for different deal profiles (residential vs commercial, regulated vs unregulated, clean vs adverse credit, sub-65% vs 70-75% LTV). A specialist broker with whole-of-market access typically routes each case to the lender most likely to deliver on speed, LTV and pricing for that specific combination — the right lender is case-specific, not a fixed shortlist. That's what we do across our 250+ product panel.
Is a bridging loan easier to get than a mortgage?
For most borrowers, yes — bridging is faster and more flexible than a mortgage. Bridging lenders focus on the asset and the exit; they care less about your income, your accounts, and your credit profile than a high-street mortgage underwriter does. That makes bridging accessible to property investors, limited companies, SPVs, retirees, foreign nationals, self-employed borrowers, and people with adverse credit — all groups who routinely struggle with high-street mortgages. The trade-off is cost: bridging is more expensive precisely because it's more permissive. "Easier" doesn't mean "cheaper" — it means "more deals get done."
Is a bridge loan different than a mortgage?
Yes. Both are loans secured against property, but the similarities largely end there. A mortgage is long-term (25–35 years), low-rate (currently around 4–6% per year), with monthly principal-and-interest payments and detailed income underwriting. A bridging loan is short-term (1–24 months), higher-rate (around 0.40–1.50% per month, equivalent to roughly 5–18% per year), typically with rolled-up interest and no monthly payments, underwritten primarily on asset value and exit strength. Mortgages fund long-term ownership; bridges fund short-term gaps. Different products for different jobs.
What are the cons of a bridging loan?
The main cons of a bridging loan are cost and term. Pricing is higher than a term mortgage (typically 0.40–1.50% per month vs ~4–6% per year), the repayment window is short (1–24 months), and the property used as security is at risk if you can't repay. Setup costs are also more layered than a high-street mortgage — arrangement fee (1–2%), valuation, legal fees both sides, and broker fee. The cons matter most when bridging is being used as a substitute for proper long-term finance; they matter less when bridging is genuinely the right tool for the specific scenario (auction, chain-break, refurb, development exit). Talk to us about whether bridging actually fits your situation, or whether a different product would.
Who qualifies for a bridging loan?
Bridging loans qualify a much wider range of borrowers than high-street mortgages. The core qualifying tests are: a suitable property to lend against, a credible exit strategy (sale, refinance, or completion of a planned event), and enough equity in the deal that the lender's day-one LTV makes sense. Beyond that, the borrower side is permissive — limited companies and SPVs (even newly-incorporated), trusts, family investment companies, SSAS/SIPP pension funds, foreign nationals, self-employed borrowers, retirees with no income but strong asset base, and borrowers with adverse credit can all qualify provided the deal fundamentals are sound. We work across a 250+ lender panel so even unusual borrower profiles typically find a route through.
Who is best for bridging loans?
Bridging loans are best for borrowers buying property where speed or flexibility creates real economic value, with a clear-defined exit. The typical "best fit" profiles: property investors buying at auction (the 28-day completion is incompatible with mortgage timelines), developers refinancing out of expensive development finance at practical completion, landlords funding HMO or refurbishment-led acquisitions ahead of BTL refinance, homeowners using regulated bridging to break a broken sale chain, businesses acquiring their own trading premises before commercial mortgage approval, and HNW or corporate borrowers protecting personal assets through SPV or no-PG structures. Bridging is best for someone who has thought clearly about how the loan gets repaid — not for someone hoping a vague refinance plan comes together.
Free Guide
The Developer's Guide to
Bridging Finance
Everything you need to know before borrowing — how deals are structured, what to watch out for, and how to avoid the 5 most costly mistakes property developers make with short-term finance.
- How to structure your deal for the best terms
- Hidden costs to watch out for (and how to avoid them)
- Exit strategy planning — the part most borrowers get wrong
Still Have Questions? Let's Talk.
Get in touch and we'll give you a straight answer. No jargon, no hard sell. If we can respond immediately we will, otherwise within 2 hours during business hours.