We use cookies to give you the best possible experience on our website. If you continue without changing your settings, we'll assume that you're happy to receive all the cookies on our website. However, you can change your cookie settings at any time.

Your Privacy

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalised web experience.

Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

(Req)

These cookies are strictly necessary for the Website to work properly and for us to keep it secure. They are needed to allow users to use the Website and its features, including to move between pages of the website.

These cookies are required

Performance and analytical cookies

These cookies allow us to collect certain information about how a user navigates the Website. These cookies collect information that is used either in aggregate form to help us understand how our site is being used or how effective are marketing campaigns are, or to help us personalise our site for you. We use Google analytics and Bing 1st party cookies, Google Marketing Platform cookies and Hotjar cookies for reporting purposes.

Cookie Name Purpose More information
Google Marketing Platform Cookies _ide, _nid, _sid, _dsid, _flc, _aid, _taid These are 3rd party cookies served by Google Marketing Platform. They serve adverts to visitors based on the websites they've been to previously. Click here for more information about Google Marketing Platform and how to disable this cookie.
Facebook   Personalise and provide products via Facebook marketing. Click here for more information about Facebook cookies.
Flash Taking   These are 3rd party cookies served by Flash Taking. They serve adverts to visitors based on the websites they've been to previously. Click here for more information about Flash Taking and how to disable this cookie.
Google Analytics _utm(x), _ga(x), _gid, amp_token These cookies are used to collect information about how visitors use our website. They keep track of when a visitor enters and leaves the website and any search engines and keywords that are used, including any personal and/or sensitive data. Click here for more information about Google Analytics cookies.
Google Optimize _gaexp, _opt_awcid, _opt_awmid, _opt_awgid, _opt_awkid, _opt_utmc These cookies are used to target content variants to users as part of website experiments. Click here for more information about Google Optimize cookies.
Bing mui(x), _uet(x) Remarketing script and conversion tracking Click here for more information about Bings Ads and how to disable this cookie.
Hotjar _hj(x) These cookies are used to record anonymous videos about how visitors use our website. They keep track of how visitors engage with pages on our website. Click here for more information about Hotjar and how to disable this cookie.
ResponseTap   These are 3rd party cookies served by ResponseTap. They serve incoming phone numbers to visitors to allow call volume tracking. Click here for more information about Response Tap cookies.
The Trade Desk   These are 3rd party cookies served by The trade desk. They serve adverts to visitors based on the websites they've been to previously. Click here for more information about trade desk and how to disable this cookie.

Marketing cookies

These cookies are used to make advertising messages more relevant to you. We may use this data to tailor the marketing and ads you see on our own and other websites and mobile apps, including social media.

Bridging Finance

Bridging loans explained

Wondering how bridging loans work? Our beginner's guide is here to explain the basics.

What is a bridging loan?

It's a short-term loan, typically lasting up to 12 months, that's designed to span the gap between an expense you need to pay now, and some money you're expecting to receive later.

The loan allows you to pay the expense immediately. And you repay the loan when you receive the money you were expecting.

What are the different types of bridging loan?

You can get a personal bridging loan (which is regulated by the Financial Conduct Authority) or a commercial one.

Personal bridging loans are secured against your home, or another property defined as personal property – like one you've inherited.

Commercial bridging loans are secured against properties you've bought (or are buying) either as an investment or to be your business premises.

How does a bridging loan work?

As it's a short-term loan, you repay whatever you've borrowed in a lump sum, as soon as you're able to.

As with all loans, you'll be charged interest on your bridging loan. This is calculated on a monthly basis – so the longer you have your loan, the more it'll cost you.

You can either pay the interest each month, or you may have the option to bundle the interest to what you've borrowed when you pay back the lump sum.

How do you repay a bridging loan?

When you're applying for your bridging loan, you'll be asked to confirm how you're intending to raise the money you need to repay it.

For example, if you were taking out a bridging loan for your business, it may be that you're using the loan to manage cashflow while you wait for a customer to pay a large invoice.

Or you might be planning to use the proceeds from the sale of a property; from an inheritance that's currently in probate; or another means, such as longer-term borrowing like a traditional mortgage.

Why would you take out a bridging loan?

There are several circumstances when a bridging loan might be a good option.

  1. When you want to repair a broken property chain when your buyer drops out, and this puts your new home at risk of falling through.
  2. When you want to invest in property as a cash buyer, because you can't wait for the buy-to-let or commercial mortgage you need to be arranged (e.g. you're buying at auction).
  3. When you quickly need an injection of cash– perhaps because you've received an unexpected bill, or you want to grow your business.
  4. When you're not planning to keep a property you're buying, because you're selling it after renovation.
  5. When you're using the loan to build a new property (or development) that you'll sell when it's completed.

A financial adviser can talk you through the pros and cons of taking out a bridging loan in each of these circumstances.

What should I consider when taking out a bridging loan?

There are some things you should mull over before proceeding:

Is my repayment method realistic? For instance, if you're planning on selling a property to repay the loan, is 12 months long enough to find a buyer and the sale to complete? Would you be able to repay the loan if you were forced into a quick sale at a lower price? Remember that if you're unable to repay your loan within 12 months, your property may be at risk of repossession.

What's the overall cost? It's important to remember that the longer you take to repay your loan, the more it will cost you so think about what it would potentially cost if circumstances meant you took the full 12 months to repay it. You should also compare more than just the interest rate and factor in any fees – like an Arrangement Fee, Exit Fee, or similar.

Share
Build: 1.3.7.16634