Bridging Loans

Bridging loans are short-term finance solutions designed to “bridge” a temporary funding gap. They are commonly used where speed is essential, such as purchasing a property before an existing one is sold, buying at auction, or funding refurbishment works.

Bridging finance is typically secured against property and is intended for short periods, often between 3 and 12 months. Interest may be charged monthly or rolled up and repaid at the end of the term.

Bridging loans may be suitable for:

• Buying a property before selling an existing one
• Auction purchases with tight completion deadlines
• Properties not suitable for standard mortgages
• Short-term cash flow needs
• Time-sensitive opportunities

Lenders will assess the exit strategy carefully. This is how the loan will be repaid, commonly through a property sale or longer-term mortgage refinance.

Because bridging loans are short term and higher risk, they usually carry higher interest rates and fees than standard mortgages. They should only be considered where the exit strategy is clear and achievable.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Property Development Finance

Property development finance is designed to support residential or commercial development projects, including new builds, conversions, and major refurbishments.

This type of finance is usually released in stages, known as drawdowns, as the development progresses and milestones are completed. Funds are typically advanced following site inspections.

Development finance is commonly used for:

• New build residential developments
• Conversions such as houses to flats
• Heavy refurbishment projects
• Mixed-use developments
• Commercial to residential schemes

Lenders will assess the experience of the developer, the viability of the project, and the projected end value. A detailed cost breakdown, development schedule, and exit strategy are usually required.

Interest is often rolled up and repaid at the end of the project, although some arrangements allow for serviced interest. Deposit and contingency requirements vary depending on risk and experience.

Development finance can be complex and requires careful planning to ensure funding remains in place throughout the build.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Commercial Mortgages

Commercial mortgages are used to purchase or refinance properties used for business purposes. This can include owner-occupied premises or properties held as commercial investments.

Commercial mortgages are commonly used for:

• Offices, retail units, and industrial buildings
• Warehouses and workshops
• Mixed-use properties
• Business premises for owner-occupiers
• Commercial investment properties

Lenders assess commercial mortgages differently from residential lending. Affordability is often based on business performance, rental income, or projected income rather than personal salary alone.

Key factors lenders consider include:

• Property type and location
• Business accounts or rental income
• Loan-to-value
• Lease terms where applicable
• Borrower experience

Terms, rates, and structures vary widely, and repayment options may include capital repayment, interest-only, or a combination of both.

Commercial mortgages are not regulated by the Financial Conduct Authority, and borrowers should understand the risks involved before proceeding.

Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.