What are bridge loans?

Bridge loans are short-term financing solutions designed to provide temporary funding 
until permanent financing can be secured. They are commonly used in real estate transactions, allowing homeowners to purchase a new property before selling their existing one. Bridge loans are also utilised by businesses to cover expenses during periods of transition or until long-term financing is obtained.

Choosing the right bridge loan lender is crucial, as it can significantly impact the overall cost and success of your transaction. A reputable and experienced lender can guide you through the process, offer competitive rates, and ensure a smooth and efficient transaction.

Criteria for selecting bridge loan lenders

When selecting a bridge loan lender, it is essential to consider factors such as interest rates, fees, loan terms, speed of funding, customer service, reputation, and regulatory compliance. By carefully evaluating these criteria, you can find a lender that best suits your specific needs and financial situation.

Let’s break down each of these factors one by one.

Interest rates and fees

Bridge loans typically have higher interest rates compared to traditional mortgages or business loans. Rates can range from the prime rate to the prime rate plus 2 percentage points, with the lowest rates usually reserved for loans with a maximum of 50% loan-to-value (LTV) ratio. Additionally, bridge loans often come with origination fees, servicing fees, and other miscellaneous expenses.

Loan terms and conditions

Bridge loans are designed to be short-term, with typical terms ranging from 6 to 12 months. However, some lenders may offer more flexible terms or the option to extend the loan if needed. It is essential to carefully review the loan terms and conditions to ensure they align with your financial goals and timeline.

Speed of funding

One of the primary advantages of bridge loans is the speed of funding. Bridge loan lenders typically have a faster application, approval, and funding process compared to traditional loans. This is particularly important in competitive real estate markets or when facing tight deadlines. Learn more about the speed of funding here.

Customer service and support

Throughout the lending process, you will likely have questions and concerns. A reputable bridge loan lender should provide excellent customer service and support, guiding you through each step of the transaction and ensuring a positive experience.

Reputation and reviews

Researching a lender’s reputation is crucial when selecting a bridge loan provider. Look for lenders with a proven track record of successful transactions, positive customer reviews, and testimonials from satisfied clients. This can help you gauge the lender’s reliability and the quality of their services.

Regulatory compliance

In the UK, bridge loan lenders must comply with specific regulations set forth by the Financial Conduct Authority (FCA). Choosing a regulated lender ensures that your transaction adheres to industry standards and that you have recourse in case of any disputes or issues.

What are the best bridging loan companies in the UK?

COMPANY	LOAN AMOUNT	LOAN TERM	INTEREST RATE	FEES	LTV
United Trust-Bank	£125k – £15m	Up to 12 months (regulated), up to 36 months (unregulated)	N/A	Valuation fee (usually); Application fee (limited occasions)	Up to 70%
Octopus Investments	N/A	Up to 24 months	From 0.70% per month	N/A	Up to 70%
Greenfield Mortgages	£26,000 – £5,000,000	Up to 12 months	N/A	N/A	Up to 70% (100% with additional security)
LendInvest Mortgage	£75,000 – £15,000,000	Up to 12 months	N/A	2% arrangement fee	Up to 75%
Precise Mortgages	£50,000 – No upper limit	Up to 12 months (regulated), up to 18 months (unregulated)	From 0.74%	2% product fee; £145 assessment fee; £40 redemption administration fee	N/A
Funding 365	£100,000 – £10,000,000	3 to 24 months	From 0.79%	At market rate, provided upon application	N/A
MT Finance	£50,000 – £10,000,000	1-24 months	From 0.99%	From 0.99%	Up to 70%
Tuscan Capital	N/A	Up to 12 months	N/A	N/A	Up to 70%
Acre Lane Capital	£50,000 – £5,000,000	Up to 12 months	From 0.75%	2% arrangement fee	Up to 75%
Aspen Bridging	£50,000 – £5,000,000	Up to 12 months	From 0.80%	2% arrangement fee	Up to 75%

United Trust-Bank

United Trust-Bank stands out as a top-tier lender in the realm of bridge finance and short-term property finance. This specialist provider offers an extensive range of bridging solutions, catering to diverse needs such as property purchases, auction acquisitions, and portfolio restructuring. With a robust partnership with the British Business Bank, United Trust-Bank has gained a competitive edge, particularly in lending for smaller house builders.

Their regulated bridging loans and unregulated options provide flexibility, enabling borrowers to secure funding tailored to their specific requirements. Embracing a customer-centric approach, United Trust-Bank ensures a smooth and efficient process, making them the go-to choice for those seeking the best bridging lender in the UK market.

Here are some notable features of United Trust-Bank’s Bridging Loans:

Octopus Investments

Octopus Investments, a division of the esteemed Octopus Group, offers a diverse range of short-term finance solutions for property purchases and developments. As a leading bridge loans lender, they provide competitive rates starting from just 0.75% per month, making them a top choice for those seeking the best bridging options. Their expertise spans residential and commercial bridge finance, catering to various needs including acquisitions and equity release.

With the backing of Octopus Group’s substantial £6 billion fund, this dynamic bridging lender brings robust resources to the table, ensuring they remain at the forefront of regulated bridging loans and property finance. Their flexible approach and swift processing make them an attractive option for borrowers requiring quick access to funds for time-sensitive property deals.

Here are some notable features of Octopus Investments Bridging Loans:

Greenfield Mortgages

Greenfield Mortgages stands out as a specialist bridge loan lender, offering tailored short-term finance solutions for property purchases. Since 2011, this innovative bridging lender has been providing both regulated bridging loans and unregulated options to meet diverse client needs. Their swift turnaround time of just one week makes them a top choice for those seeking the best bridging finance.

With loan amounts ranging from £26,000 to £5 million, Greenfield caters to a wide spectrum of property finance requirements. Their flexible approach to lending, coupled with competitive rates, positions them as a go-to option for borrowers in England and Wales. As a patron of the National Association of Commercial Finance Brokers, Greenfield maintains high standards in the bridge finance industry.

Here are some notable features of Greenfield Mortgages Bridging Loans:

LendInvest Mortgage

LendInvest Mortgage has quickly become a powerhouse in the UK’s bridge finance sector. This innovative bridging lender offers a wide array of short-term finance options, catering to various property purchase needs. With backing from major investors, LendInvest provides some of the best bridging loans in the market.

Their offerings span regulated bridging loans, unregulated options, and specialised products for developments and refurbishments bridging loans. LendInvest’s flexible approach to property finance makes them a top choice for borrowers seeking swift, tailored solutions. Whether you’re after a small residential mortgage or a large-scale commercial project, this direct lender has options to suit your requirements.

Here are some notable features of LendInvest’s Bridging Loans:

Precise Mortgages

Precise Mortgages brings elegance to the bridge finance arena with its refined approach. This sophisticated lender offers a carefully curated selection of regulated and non-regulated bridging loans, catering to discerning property investors. Their loan offerings start at a modest £50,000, with no upper limit, accommodating projects of all scales.

The true hallmark of Precise Mortgages lies in their thoughtfully designed interest options and loan terms. They’ve crafted a bespoke range of products to suit diverse borrower needs, whether for swift property transactions or extended refurbishment projects. Their competitive rates and transparent fee structure have earned them a sterling reputation among those seeking polished short-term property finance solutions.

Here are some notable features of Precise Mortgages Bridging Loans:

MT Finance

MT Finance shakes up the property lending scene with its fresh take on bridging loans and auction finance. Since 2008, this London-based lender has been turning heads by doing things differently. Instead of fussing over credit scores, they look at what really matters – the property’s value and what you plan to do with it. It’s like they’re saying, “Show us a great property and a solid plan, and we’ll help you make it happen.”

Their flexible outlook has won them a loyal following among property investors and developers. MT Finance’s commitment to top-notch customer service hasn’t gone unnoticed either, bagging them several industry awards. With competitive rates and a wide range of loan options, they’ve become a go-to choice for those seeking quick, hassle-free property finance.

Here are some notable features of MT Finance’s Bridging Loans:

Tuscan Capital

Tuscan Capital started in 2018, founded by Colin Sanders, the former CEO of Omni and Fortwell Capital. Backed by Quilam Capital, it provides unregulated bridging loans for personal and semi-commercial properties with an LTV of up to 70%.

They also have a great refurbishment funding package for commercial developers, covering properties valued up to £3 million.

Here are some notable features of Tuscan Capital’s Bridging Loans:

Acre Lane Capital

Acre Lane Capital was founded by experienced professionals from the financial industry, aiming to address the specific needs of property developers and investors. Ian Wilson, the CEO, previously held senior roles at JP Morgan and Vitvo, bringing extensive expertise in structured credit and investment banking.

Acre Lane Capital offers flexible and competitive financing solutions. Their commitment to quick decision-making and transparent, fee-free terms ensures a seamless borrowing experience for short-term loan.

Here are some notable features of Acre Lane Capital’s Bridging Loans:

Aspen Bridging

Aspen Bridging, founded in 2017 by Ed Ahrens and Jack Coombs, is an award-winning bridging lender. They provide funding for both UK and foreign clients, offering a variety of loan products including bridging, light development, and bridge-to-let loans. Aspen prides itself on rapid service and transparency, assigning a dedicated underwriter to each case to ensure efficient handling and clear communication.

Here are some notable features of Aspen Bridging:

Steps to a successful bridge loan application process

Pre-application preparation

Before applying for a bridge loan, it’s crucial to have all the necessary documents and ensure your financial situation is in order.

Documents needed:

Financial readiness:

The application process

The bridge loan application process typically involves the following steps:

Post-application Tips

After submitting your bridge loan application, consider the following:

By following these steps and being proactive throughout the application process, you can increase your chances of securing a successful bridge loan that meets your financial needs.

How much does a bridging loan cost?

When it comes to short-term finance, bridging loans are known to be on the pricier side. Typically, lenders tack on a minimum interest rate of 1% each month. On top of that, expect an arrangement fee of around 1% and an exit fee of another percent.

Given these costs, bridging loans work best for quick-turnaround investments, particularly in sectors like property development where timing is crucial. It’s vital to have a solid exit plan in place to manage these expenses effectively.

For more detailed insights into the costs associated with bridging loans, you can check out our comprehensive guide on how much does a bridging loan cost?

Why do you need a bridging loan broker?

When it comes to securing a bridging loan, working with an experienced broker can provide significant benefits. Here’s why you should consider using a bridging loan broker in the UK market:

By working with a reputable and experienced bridging loan broker in the UK, you can access a wider range of options, benefit from expert guidance, and increase your chances of securing a bridging loan that meets your specific needs.

Alternatives to bridging loans

Bridging loans are a popular choice for quick cash in the UK, but they’re not your only route. Here are some other options that might better suit your needs:

Each option has its perks and pitfalls. To dive deeper into alternatives like these, explore our detailed guide on alternatives to bridging loans.