What is Bridging Finance?

Bridging finance is a short-term loan used to bridge the gap between the purchase of a new property and the sale of an existing one. This type of financing is typically used by individuals or businesses that need to quickly access funds to complete a real estate transaction when their capital is temporarily tied up in another property.

How Bridging Finance Works

Bridging finance provides borrowers with immediate access to funds based on the value of their existing property. The loan is usually secured against the borrower’s current property, and the amount borrowed is repaid once the existing property is sold. Bridging loans typically have higher interest rates than traditional mortgages due to their short-term nature and the associated risk.

Advantages of Bridging Finance

• Quick Access to Funds: Bridging finance provides fast access to capital, enabling borrowers to complete the purchase of a new property without waiting for their existing property to sell. This is particularly beneficial in competitive real estate markets where quick action is required.

• Flexibility: Bridging loans offer flexibility in terms of repayment. Borrowers can repay the loan once their existing property is sold, without strict deadlines.

• Facilitates Property Transactions: Bridging finance helps individuals and businesses avoid property transaction delays. It ensures that they can secure a new property while waiting for the sale proceeds of their current property.

• Avoids the Need for Temporary Accommodation: Bridging loans can prevent the need for temporary housing arrangements. Borrowers can move directly from their current property to the new one without interim moves, reducing the stress and cost associated with moving multiple times.

• Supports Property Renovations: For individuals looking to renovate a property before selling it, bridging finance can provide the necessary funds to complete renovations. This can enhance the property's value and potentially lead to a higher sale price.

• Opportunity to Secure Better Deals: By having immediate access to funds, borrowers can take advantage of time-sensitive opportunities, such as purchasing properties at auction or negotiating better terms with sellers who prefer quick transactions.

• Customisable Loan Amounts: Bridging finance allows borrowers to customise the loan amount based on their specific needs, whether they need the full purchase price of the new property or just a portion to cover the gap.

Apply for Loan