Bridging the Gap With Tailored Bridging Loans.
Short term financing for when time won’t stand still.
Keeping things moving even when there’s a delay.
Got something big to pay but waiting for incoming funds? Are you waiting for the sale of a property so you can complete on another but there are delays? Or maybe you’re looking to buy a property at auction and need funding before a mortgage is in place? When situations like this occur and there’s a gap in finance, a bridging loan could be an ideal solution.
What are Bridging Loans?
Bridging loans are short-term secured loans (against a property) designed to provide funds to bridge the gap when there’s a shortfall between outgoing expenses and incoming funds. They can either be personal bridging loans, whereby funds for your business are secured against your home; or commercial bridging loans, whereby funds are secured against commercial property you already own.
Benefits of bridging loans
Funds often released quickly
Short loan term - usually up to 12 months
Faster application process
Less conventional property types considered
Would a bridging loan work for you?
Bridging loans are most commonly used in situations involving property sales and development delays, and often to purchase land too, but the benefits of bridging loans mean they can be useful in a variety of situations where funds or capital need to be released.
Some common scenarios include:
When a quick completion is needed on a property purchase
Emergency cash flow injection within a business
For payment of a due/overdue tax bill
To complete a development
To repair credit
To acquire land
When the property you need to secure funds against is a little less conventional
The key to the right type of finance
With so many lenders offering bridging loans, it can be time consuming trying to secure the right finance alone - in these situations we know time is of the essence. When you choose to be supported by the people here at Key, you benefit from a team who know exactly where to look, ensuring a faster and more efficient application.
What’s more, our ethical approach combined with our experience and knowledge of the diverse lenders and products on the market mean we won’t just opt for any old finance, we’ll find the one with terms that work for you.
Find out more about why people like you choose Key.
Bridging Loan Calculator
The amount you can borrow depends on a number of factors, such as the value and type of the property you are securing the loan against, and your financial situation. With just a few details, our Bridging Loans calculator can quickly give you an estimate of what you might be able to borrow and what your repayments might look like.
Our Success Stories
When we say we can help in even the most complex of situations - like those requiring Bridging Loans - we mean it. Take a look at some of the people we’ve been able to secure the right finance for over the last 30 years.
Bridging Loan FAQs
-
The amount of money you can borrow for a bridging loan will vary depending on a number of factors, but loans are typically available for up to 75% of the property’s value. Amounts may be greater if a ‘first charge’ bridging loan is taken out (this is possible if you own the property outright), but this will depend on lending criteria. Our bridging loans calculator can help give a quick estimate of what you could borrow.
-
Due to their nature, bridging loan rates tend to be significantly higher than with traditional loan rates. Interest is often charged monthly rather than annually, and typically ranges from 0.85 to 2%, with around 1% per month being a good benchmark. Depending on the terms of the bridging loan this may be paid throughout the term of the loan or when the loan comes to an end.
-
Depending on the loan amount, potential security available, and your current situation, you may still be able to get a bridging loan if you have bad credit history. The terms of the loan may include higher interest rates and lower lend amounts, but it will depend on the lenders criteria.
-
Bridging loans will often need to be repaid within 12 months, although the time frame can be significantly shorter (as short as a week or two) and in some cases longer (up to 36 months). The terms will depend on individual lenders, and in some cases the exit strategy for the loan.
-
Yes, you can use a mortgaged property as security against a bridging loan. The type of bridging loan in this case would normally be a ‘second charge’ bridging loan, and is likely to have a higher interest rate and stricter terms than a first charge bridging loan. The approval will also depend on the remaining equity in the property and the agreement of the first charge lender.
Not sure a Bridging Loan is right for you?
If a bridging loan doesn’t seem like the perfect fit right now, why not explore some of our other service options.