Short-term finance secured against a property or “bridging” finance is widely used by property investors and developers as well as business owners for a variety of reasons. Bridging lenders will lend in situations where the more traditional lenders will not, and can provide loans in a much shorter time frame if a quick completion is required. Acceptable security includes residential and commercial property of any type and in any condition, and land with or without planning consent.

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Short-term facilities can be used for as little as 1 day or up to 18 months, and in some cases longer. In most cases a provision for interest is deducted from the gross loan amount on completion of a bridging loan, but some lenders allow interest roll-up if interest cannot be serviced.

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As the cost of a bridging loan is higher than a more traditional loan, an exit strategy is important. Exits are usually via refinance or sale on the open market.

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There is a massive range of bridging lenders to choose from, so it is essential to have an understanding of the intricacies and mechanics of such facilities so the most appropriate and cost-effective option is utilized, from the right lender.