Guide to taking out a bridging loan

When taking out a bridging loan, the process can be quite straightforward but it’s important to research the market first and decide what type of finance you need before applying. We’ve provided a quick guide to the different types as well as the process of applying, so you know exactly what to expect.

Research

Depending on what you need the finance for, there are specialised bridging loans to help. By researching the market, you can get a good idea of what’s best for your situation and whether you need an open or closed bridging loan. Calculate how much you need to cover the cost and use a bridging loans calculator to get an estimate of the interest you’ll be paying back in monthly payments. Below is a brief outline of the range of bridging loans available.

Types of bridging loans

Bridging finance – finance for any legal purpose, including property investment, VAT bills, tax bills, refurbishment, holidays or your child’s education.

Renovation finance – if you are looking to renovate properties or work on a construction project, renovation finance can provide the necessary funding to carry out the work.

Buy to let bridging loan – if you want to buy rental property but can’t yet sell existing property to fund it, a buy to let bridging loan can cover the cost. This type of loan can also help if you’re securing a cheap deal at auction and need finance quickly.

Commercial bridging loan – perfect if you’re looking to inject cashflow into your business, buy commercial premises or purchase new stock. As you can get funding quickly, you won’t have to miss out on investment deals.

Bridging loans for auction property – With a 28-day time frame to complete an auction property purchase, it can be tricky to secure a mortgage in time. A bridging loan can provide quick access to funds to cover the cost of the purchase.

Bridging loans for uninhabitable property – If you want to buy a property that is in poor condition, it can also be hard to secure a mortgage. A bridging loan provides the finance needed to renovate the property so a mortgage can then be organised.

Contact a specialist broker

Once you have researched the different types of bridging loans and have an idea of what you want, it’s best to speak to an expert. An specialist broker can review your individual situation and search the marketplace to find a bridging loan to match your requirements. At Commercial Trust, we commonly get you a decision in principle within two hours.

Our advisors will explain the bridging application process clearly for you, contact our team for more tailored advice on financing your project.

This information should not be interpreted as financial advice. Bridging loan rates are subject to change. Speak to our advisors for a loan illustration.

Top