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What are large bridging loans?
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Large bridging loan case studies:
Refinance Farm With Bridging Loan To Resolve Divorce Settlement »
€3m Bridging Loan On Ibiza Residential Property To Fund London Development Project »
Large Bridging Loan On Sussex Property While Waiting For Planning »
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In the video below, our Head of Bridging, Sam O'Neill, explains what large bridging loans are, their costs, timescales, example uses, and how you can get one.
A bridging loan, also known as a bridge loan, is a type of short-term financing used to bridge the gap between purchasing a new property and selling an existing one.
It's common for them to be used by people or companies who need to secure financing for a property purchase quickly but may not have all the necessary funds to hand.
There are many situations in which bridge loans can be helpful, but this article focuses specifically on large bridge loans, which are over £500,000.
These loans are typically used for commercial property purchases or expensive residential homes and are attractive for those needing significant financing for a property transaction.
While you're here, read some of our bridging loan case studies or see below
There are many different types of lending options when you're buying a buying property:
Mortgages, for example, are a common way for people to finance the purchase of a home, while commercial loans are often used to fund the expansion of a business.
On the other hand, Bridging loans are a unique type of short-term financing that can be used in various situations and are often regarded as the ultimate form of flexible finance.
Understanding the ins and outs of bridging loans is essential if you're considering one for a commercial or residential property purchase.
This article explores the basics of large bridging loans, including how they work, the pros and cons of using one, and how to secure a loan of this size.
To understand how large bridging loans work, it's important to understand the basics of property financing. When an individual or business wants to purchase a property, they may not have the entire purchase price available upfront. They may turn to a lender, such as a bank, to secure finance in these cases.
A mortgage is a loan used to finance your property purchase and is typically secured by the property itself. This means if you can't afford to repay your mortgage, your bank can sell your home to recover the money they've lent you.
You pay your lender a monthly payment that includes both the capital you've borrowed and the interest.
Unlike a mortgage or a commercial loan, a bridging loan is a short-term financing solution. They are typically only designed to be used for a few months or until you can secure more permanent financing (such as selling another property or asset or getting a standard mortgage for the long term).
Because of their short-term nature, bridging loans typically come with higher interest rates than other types of financing. Bridging loan interest rates are also displayed as a monthly rate, not an annual rate like a standard mortgage.
Related: Check out our bridging loan calculator.
When it comes to financing the purchase of a valuable residential or commercial property, it can be beneficial to work with a specialist in the field. An expert in large bridging loans can guide you through obtaining this type of financing.
A few different types of lenders may offer large bridging loans for commercial property, including banks, credit unions, and online lenders.
Finding a reputable lender with a track record of success is essential. It would help if you also looked for a lender with competitive interest rates and fees and a reputation for excellent customer service.
In addition to traditional lenders, consider working with a mortgage broker.
A mortgage broker is a professional who works with various lenders to help you find the right financing for your needs.
Mortgage brokers can be a useful resource when finding a specialist in large bridging loans, as they may have relationships with lenders that are not available to the general public.
There are two types of bridging loans: "open" and "closed" bridging loans.
A closed bridging loan has a fixed end date, meaning the borrower must repay the loan by a specific date.
Borrowers often use these loans when they expect to sell an existing property or receive a large sum of money within the timeframe.
An open bridging loan does not have a fixed end date. While you must have an "exit strategy", I.e., a plan to raise funds to repay your loan, you might not have a fixed date for this event yet. These loans are often used when you're still determining when you can secure permanent financing. Most bridging loans have a maximum term of 18 months.
In the UK, all lenders, including those that offer large bridging loans, must be authorized by the FCA and follow strict guidelines regarding lending.
These guidelines ensure that lenders are fair and transparent in their lending practices, that borrowers are treated fairly, and given all the necessary information to make informed decisions about their loans.
If you're considering a large bridging loan in the UK, it's important to work with a lender that the FCA regulates.
Bridging loans are designed to be a quick and flexible financing solution. As a result, it is possible to get a bridging loan in a relatively short period, often within a few days or weeks.
The exact time it takes to get a bridging loan will depend on various factors, including your lender, the amount of your loan and your exit strategy.
In general, however, bridging loans can be processed more quickly than traditional mortgages. They don't require the same types of affordability calculations that standard mortgages do, which are based on your income, debts and credit score, among other factors.
I approached Clifton Private Finance to help me get a mortgage as an Expat working in the Far East. I would normally 'cut out the middle man' on something like this and try to get myself a deal directly with the banks, but I am now sold on the broker concept and wouldn't hesitate to use Clifton Private Finance again. There were a number of complicating factors such as being an expat, the stamp duty holiday, the sheer amount I wanted to borrow and the fact I wanted it all wrapped up before the Stamp Duty holiday ended. It is clear to me now that the relationship that brokers have managed to foster with their banks means they can simply pull levers and make stuff happen that us ordinary folk cannot. Put simply, they are worth every penny, will take most of the stress out of the lending process, and seem to have access to deals that you just won't find on the internet. Thank you George and Jan for all your hard work!
James M
Luther was excellent. Very clear in his advice and explanations of products and was able to move things on very quickly when we ran into difficulties with the estate agents. Without a doubt I would recommend Luther to all friends, family and colleagues. Luther was a joy to deal with and took a lot of the stress out of a troublesome transaction, from my end. I would view Luther as real asset to Clifton Private Finance Ltd.
William W
The team at Clifton Private Finance has been outstanding, not only in helping me to obtain a mortgage on a slightly unusual home, but also in continuing to provide support and liaise with the lender and solicitors through to completion. Thank you for making the process of buying my first home much easier.
Chantelle S
Sam O'Neill, and the new lender he identified for me, worked tirelessly together using my time constraints, to make sure my mortgage application was completed on time. They are a brilliant company to work with, fast, efficient, open and transparent from the very beginning, and turned a seemingly impossible situation into a viable one. Sam was brilliant throughout the whole process and I would highly recommend him, and his colleague Helen, to anyone without hesitation, I cannot speak highly enough about them.
Myr B
I was incredibly lucky to find Clifton Private Finance after a search on line as their service has been more than exemplary. My point of contact was Sam 0’Neill and he was happy to help at every stage during the application of the bridging loan, making a stressful process much easier to deal with. He was always available by phone or email and gave prompt answers to queries I had as well as always getting back to me when he said he would. That to me is excellent customer service and I cannot thank him personally or the company enough for the support they have given me.
C Jefferey
Adam cannot thank you enough for all your support throughout this arrangement. You have gone more than the extra mile to support us. Without you we would not have got our dream retirement home. You have been most professional and personable. Liz and I would be more than happy if you wanted to use us a reference with respect to any future clients.
Nigel & Liz K - Bristol
You have certainly shown me that you do everything for your clients, including tolerating their excessive emails and questions for updates. I have been kept in the loop, from yourself, about why the delays were occurring (Nationwide, post etc) which I would like to highlight that I really appreciated. I certainly will be able to recommend you to others as and when the need arises.
Mr Morris
I recently contacted Clifton Private Finance after a Google search for bridging finance providers and was immediately struck by their efficiency and support. Forms were emailed over almost immediately and the necessary finance was arranged within a few days. None of the other companies I contacted came close to their professionalism, and the quote that I eventually received was impressive. Thank you Adam, your help has enabled us to reserve the house that we wanted and I certainly recommend you to others.
Mr M. R. - Oxford
Absolutely brilliant. The service was first class, got everything sorted efficiently and were always friendly. Any fees were negligible compared to the service offered. Robert was particularly outstanding.
Charles N
My advisor, Robert, was very helpful in finding the mortgage to suit me. He kept me up to date throughout the process and dealt with any issues when they arose.
Rowena C
