Bridging Finance

Good and bad with bridging loans

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Good and bad with Bridging Loans

Bridging loans are most definitely a good short term option used to facilitate something else happening. They are mainly used to raise short term capital quickly, when it is not available through conventional borrowing.

Bridging is not the cheapest method of borrowing, so people thinking of bridging should have something to gain by doing so. If buying something to make a profit, bridging can be a good option. But remember to factor in the cost of funds in to your profit figures.

New to bridging? Learn the basics fast with these explainer videos

Features people like about bridging loans include:

Specialist lenders are generally geared up to complete applications faster than mainstream lenders. Find out more about how fast bridging finance can be completed here.
The proposed monthly payments can be added to the loan so they don’t need to be made monthly. This aids cash flow or helps borrowers who can’t afford the additional cost of a bridging loan.
Lenders may be more flexible about the property condition – good for refurbishments.
If buying at auction the loan can be agreed before you buy.
If you have arrears or bad credit, lenders are more relaxed. This is because the loan repayments are built in to the loan.
Lenders are more open to using a number of properties as security.

The general rule is that if you have plenty of equity, a definite means of repaying the loan quickly and offer suitable security it is likely you can get a bridging loan. However, that doesn’t mean it is the best solution so you speak to an expert about the alternatives.

Things you may not like about bridging loans…

If you are thinking about a bridging loan, ask yourself why you need the money now.

It may be you need to complete quickly to make a large profit on a business deal.
It may be that you need to repay something quickly and there are serious repercussions if you don’t.
You may have your heart set on buying a dream home.

Whatever the reason, make sure you factor in the costs of bridging in to the equation. Bridging is short term borrowing so whatever fees and interest you pay, needs to stack up against the benefit of the deal or purchase you are contemplating.

Points to consider when weighing up the pro’s and con’s:

It is short term borrowing – do you definitely have a plan and the means to repay the loan at the end of the term?
The interest rates and fees are nearly always higher than mainstream unsecured, mortgage or second charge lenders – have you exhausted these options?
Have you considered the default interest rates if you can’t repay the loan when it’s due?
If your interest payments have been added to the loan, you are paying interest on this too and it will form part of the total loan amount you borrow.
Do you understand the total cost of the facility and have you weighed this up against your proposed project or loan purpose? Does it still make sense?

You can get indicative rates and repayments without submitting a full application – jusk to speak to one of our experts.

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Whole-of-Market Guidance for Bridging Loan Benefits

Securing competitive terms on bridging loan benefits requires expert underwriting knowledge. In addition, our specialist broker team works directly with over 90 specialist lenders across the UK.

Consequently, reviewing your bridging loan benefits options with an FCA-authorised specialist credit broker ensures whole-of-market access while avoiding unnecessary fees and delays.

Specialist Underwriting & Whole-of-Market Access

Because specialist lending facilities require bespoke underwriting, comparing lenders across the UK is essential. Explore our complete guide to Bridging Loans Desk to understand how different lending criteria apply to your requirements.

Promise Money is an independent credit broker authorised and regulated by the Financial Conduct Authority (FRN 681423). Our experienced team reviews your specific circumstances to secure optimal terms across 90+ UK lenders.

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Key Takeaways: Bridging Loan Benefits Checklist

Additionally, property valuations can often be expedited or desktop-assessed, significantly reducing upfront costs and surveyor delays.

Furthermore, specialist bridging lenders assess affordability based on property equity rather than strict credit scoring alone.

Consequently, time-critical auction purchases and broken chains can complete in as little as 3 to 7 working days.

Therefore, working with Promise Money ensures you compare optimal rates and terms across 90+ UK lenders.

Specifically, flexible interest options—including retained, rolled-up, or serviced interest—can be tailored to protect your cashflow.

Moreover, facility agreements can be structured with zero redemption penalties as soon as long-term funds are ready.

In addition, non-standard property construction such as timber frame or concrete can be financed without high street restrictions.

Crucially, borrowers facing historic credit blips or complex income structures can secure competitive terms through our panel.

In practice, working with experienced specialist solicitors prevents administrative hold-ups and keeps legal fees completely transparent.

Above all, establishing a verified exit strategy—such as property sale or remortgage—ensures smooth facility redemption.

As a result, property investors and homeowners retain complete control over project timelines and financial commitments.

After all, independent whole-of-market guidance ensures you never pay unnecessary arrangement fees or higher interest margins.

Meanwhile, bridging facilities can be secured across multiple properties to maximize borrowing capacity without selling assets prematurely.

Indeed, rapid decision turnaround gives you the confidence to bid decisively at property auctions.

Finally, clear illustrations provide total transparency regarding interest roll-up, arrangement fees, and net advance figures.

Unlike standard mortgages, specialist bridging finance provides fast liquidity when conventional banking channels are too rigid.

Fortunately, regulated bridging options provide statutory protection when securing loans against residential family homes.

Ultimately, dedicated case managers coordinate directly with lenders and surveyors to keep your completion strictly on schedule.

Similarly, adverse credit bridging lenders focus on overall equity and future redemption rather than automated scores.

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