A bridge loan, also known as bridging finance, is a type of short-term loan used to cover financial gaps between two large transactions, particularly with property.

It is a convenient solution for borrowers who need to purchase a new property before selling their existing one. 

Bridging loans are usually secured by a mortgage or a guarantee, which means that if the borrower defaults on the loan, the lender can seize the collateral.

These loans can also be used to refinance an existing mortgage or to purchase an auction property.

Bridging finance is more flexible than traditional loans, and borrowers can usually access funds within a few days.

Bridging Loans can be used for a variety of purposes, including:

• Commercial Bridging Loans 
• Bridging Loan Property Purchase
• Bridging Loan for Property Development 
• Regulated Bridging Loan
• Auction Bridging Finance 
• Bridging for Refurbishment
• Bridging Loan for Unmortgageable Properties
  
  

Interest rates for bridging finance are typically higher than for traditional loans, and borrowers should be prepared for the additional charges associated with this type of finance.

What are the criteria for a Bridging Loan?

In order to secure a bridge loan, a borrower must meet certain criteria.

Borrowers who have a higher credit score, detailed business plan, and sufficient collateral have a greater chance of being approved for a bridge loan with favourable terms.

Additionally, the borrower must have a clear exit strategy detailing how they plan to repay the loan, such as through the sale of the property or refinancing to a longer-term solution like a mortgage.

Overall, a bridging loan can be a valuable financing option for individuals or businesses looking to bridge a short-term gap in financing, but it’s important to carefully consider it before applying. 

How do I get a Bridging Loan?

If you need a bridging loan, you should first approach a lender or a broker that specialises in this type of finance. 

To apply for a bridging loan, you’ll typically need to have a mortgage or property as security and provide evidence that you can meet the repayment terms. 

Bridging loans can be either regulated or unregulated. In both instances, lenders will require you to provide security, this is usually a 1st or 2nd charge against a property owned by you. So, it’s essential to work with a reputable lender or broker like GPS Financial.

When choosing a lender or broker, make sure to research their reputation and experience. 

They should be transparent about their fees and provide you with a range of bridging loan options that suit your financial situation.

Ultimately, it’s essential to do your due diligence and ensure that a bridging loan is the best option for your financial circumstances before making any decisions.