FAQ
Some Frequently Asked Questions and useful terms
What is a bridging loan?
A short-term loan typically required by property developers and traders to bridge a financial gap in between a transaction completing or when there is only a short window available to raise finance. The loans are always secured against property(s).
How are they different from mortgages?
Bridging loans are not long-term ways to fund something, they’re ways to quickly get from one situation to another, to tide you over, for example while you’re waiting for a sale, or for other funds to arrive.
How much can I borrow?
Our typical range is £50k to £5m, but in special circumstances we have strategic partners who can assist us in funding larger loans.
How much of the property’s value can I borrow?
We don’t have a one rule fits all criteria. As an example we would typically lend up to 75% LTV on Residential but if additional security is on offer then this could be 100%. Depending on the model and proposed exit strategy, we can be very flexible. This is the benefit of our structure.
How are you funded?
We are privately funded for our core business hence the ability to be flexible. However, we have partnerships, with a variety of equity and institutional funders that allow us to look at a wider range of loans i.e larger value. This gives us the best possible chance to assess each loan according to its own strengths and provide a suitable method of funding that works for the borrower.
What are the lengths of your loans?
Typically, anything up to 12 months however this can be longer if needed.
What are your rates and fees?
This is deal dependent – one thing is we are very quick and after an initial conversation we will be able to provide a fairly accurate idea on rates and fees.
How is the loan secured?
By taking a first legal charge over the property to be used as security. Second legal charges as extra security might sometimes be a possibility, subject to individual circumstances.
Does approval take long?
Different cases are more or less complex, so it’s impossible to generalise. But on average we have an answer back the same day with an offer letter to follow within 24 hours.
Who do you lend to?
Limited companies, partnerships, individuals, offshore companies, trusts, Limited Liability Partnerships (LLPs).
Where do you operate?
We operate throughout England and Wales, although that doesn’t mean it’s essential borrowers live there.
What about adverse credit applications?
We accept all applications and treat each on its merits; we underwrite by people, not algorithms, credit scores or formulae.
Can the loan be repaid early?
Yes. If things work out for you better or faster than you thought, then you can repay early.
What happens if problems mean I can’t repay within my term?
As long as the exit strategy is agreed and we’re happy with it, we would work with our borrowers to agree an appropriate extension.
What is an exit strategy?
A term used to demonstrate a plan is in place to repay a loan by the end of the term.
How do I make payments?
As with everything we do, flexibility is key, so we have different options we can match to customers’ different needs. This might mean interest-only payments made monthly, deducting whole interest from the loan or adding the interest of the balance to the loan so that no monthly payments need be made. Some borrowers prefer lower monthly payments, with the balance added being added to the loan.