Bridging Finance FAQs

• Who will you lend to?
• How fast can bridging finance be arranged?
• How long can I have a bridging loan for?
• When do I need to repay the loan?
• Can I repay the loan early?
• What if I can't repay the loan on time - can the term be extended?
• How much can I borrow against my income?
• What is your maximum loan to value?
• Do I need to make monthly payments?
• Can you lend on unmortgageable property?
• Will you lend to someone with adverse credit history - with CCJs, arrears or a bankrupt?
• I am self employed / a company director - do you need to see my business accounts?
• What is the difference between Open Market Valuation, 90-day Valuation and Forced Sale Valuation?
• I had a valuation carried out recently - can you use this valuation report?
• What is your arrangement fee and interest rate?
• Why are the interest rates high?
• Are you registered with (or are your loans regulated by) the Financial Services Authority (FSA) or the Consumer Credit Act (CCA)?

Who will you lend to?

We can arrange bridging finance for sole traders, partnerships, LLPs, UK limited companies, offshore companies, trusts, charities and for individuals who complete a declaration of business use or a statement of high net worth.

How fast can bridging finance be arranged?

We can usually agree an application in principle within an hour, which will be subject to valuation, legal searches etc. Completion of the loan is usually within 7-10 days, but we have completed cases in 2 days where exceptionally urgent.

How long can I have a bridging loan for?

Bridging finance is a short-term loan, usually for 1 to 12 months, although we can arrange it for as little as 1 day - or up to 24 months. You must have a definite plan to repay the loan (known as your "exit route") and you decide the term of the loan with this in mind.

When do I need to repay the loan?

You will normally be required to repay the loan by the end of the term, which you agreed at outset. You may be able to repay the loan sooner, or later - see below.

Can I repay the loan early?

Yes you can repay the loan early. Bear in mind that a charge may apply for early repayment, so if you are likely to require this facility, please advise us at outset and we can arrange a bridging deal without this charge.

What if I can't repay the loan on time - can the term be extended?

If plans change and an extension is required, this can usually be arranged. A charge may apply for either early or late repayment, so if you are likely to require this facility, please advise us at outset and we can arrange a bridging deal without this charge.

How much can I borrow against my income?

We don't usually take your income into account; we lend against the value of the property and on your ability to repay the capital at the end of the agreed term, i.e. your exit route. For this reason, bridging finance is usually agreed on a non-status basis or self-certification of income.

What is your maximum loan to value?

This depends on the type of property and whether there is already a loan secured against it. We normally lend up to 80% LTV for residential property, or 70% LTV for commercial property or land with planning permission. We can lend up to 100% of purchase price or value with additional security. Second or third charge bridging can be arranged up to 65% LTV.

Do I need to make monthly payments?

Interest is charged monthly, and you can choose either to pay this interest monthly, or have the interest added to the loan. The latter option will be more expensive due to the compound interest effect, but as bridging finance is a short term facility, this is not excessive.

Can you lend on unmortgageable property?

Yes, provided our valuer states the property is acceptable as security for the term of the loan. Many other banks and building societies are unable to lend against dilapidated or uninhabitable properties and place a full retention on the loan until the necessary remedial work is carried out. Bridging can provide the short term funds required to get this work done.

Will you lend to someone with adverse credit history - with CCJs, arrears or a bankrupt?

Yes. Bridging finance is usually agreed on a non-status basis. We lend against the value of the property and on your ability to repay the capital at the end of the agreed term, i.e. your exit route. We can lend to those whose bankruptcy has been discharged, but cannot where the bankruptcy is undischarged.

I am self employed / a company director - do you need to see my business accounts?

No. We don't usually take your income into account; we lend against the value of the property and on your ability to repay the capital at the end of the agreed term, i.e. your exit route. For this reason, bridging finance is usually agreed on a non-status basis or self-certification of income.

What is the difference between Open Market Valuation, 90-day Valuation and Forced Sale Valuation?

These are 3 types of valuation that lenders may use when assessing how much they can lend. An Open Market Valuation is most commonly used by mortgage (and some bridging) lenders, and is the price the property should sell for in the current marketplace. A 90-day valuation is lower, as it is the price the property should sell for within 90 days of marketing. Finally, a forced sale valuation is lowest, as it is the price that the property should sell for if an immediate sale were required. We always try to use an Open Market Valuation, as this will provide the highest loan amount.

I had a valuation carried out recently - can you use this valuation report?

Possibly. Some lenders use a strict list or panel of approved valuers, so would need your valuer to be on their panel. Others can use any firm of valuers, subject to certain criteria. Bridging lenders require slightly different information from the valuer, so your valuer may charge a fee to retype his report.

What is your arrangement fee and interest rate?

These vary according to many factors. Our best terms currently are arrangement fee of 1% and interest rate of 0.89% per month, with valuation fee refunded up to £500. Please ask us for an individual quotation.

Why are the interest rates high?

We don't think rates are high when you compare like with like. Bridging rates should not be compared with a long term loan like a mortgage - these are totally different products with different purposes. Bridging rates should be compared with other short term loans, e.g. a credit card or overdraft. All short term loans have a higher interest rate compared to long term loans; as always you pay extra for the convenience of a quick and simple facility - especially one that allows you to take advantage of an opportunity that you would otherwise miss.

We are 100% committed to giving our clients best advice. This means that if a long term loan is more suitable for your requirements, we will tell you so. But if a long term loan is not appropriate, you can't compare the terms!

Are you registered with (or are your loans regulated by) the Financial Services Authority (FSA) or the Consumer Credit Act (CCA)?

No. Around 95% of all bridging finance transactions are NOT regulated by either the FSA or CCA*.

We believe in total transparency, and we have deliberately chosen not to be regulated by FSA or hold a Consumer Credit Licence, so as to avoid giving the misleading impression that our service or loans are regulated.

* Financial regulation in UK is complex, but basically the only bridging finance transactions that are regulated is where the loan is secured by a first charge against your main residence or a semi-commercial property which provides residential accommodation for the borrower (or close relative/connected person) with an area greater than 40% of the total property. We can put you in touch with an FSA regulated broker to arrange such finance.