News and insights

Down Valuations on the Rise – What Happens to Your Purchase?

Whether you’re a business owner looking to purchase a new property or remortgage, or you’re a homeowner looking to do the same, a down valuation can come as a nasty surprise. But what exactly is a down valuation, why do they happen and what can you do about it? In this blog, we’ll answer the above questions, ensuring you understand everything you need to know about down valuations, both for…

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Can You Get a Bridge Loan with Bad Credit?

When financial challenges arise and you find yourself in need of quick funds, bridge loans can be a viable solution. They can help to bridge the gap between a pressing financial need and a more permanent financial solution. However, for those who have less-than-stellar credit, the question that springs to mind is can you secure a bridge loan with a poor credit score? In this blog, we explore the…

News and insights

What is bridging finance?

There are so many terms floating around in the world of finance that it’s easy, even for a seasoned business owner, to get a little confused about which is which. One such term, ‘bridging finance’ is a seriously popular one with businesses looking to grow. Why? Because bridging finance offers an unparalleled level of flexibility, efficiency and consistency. So, whether you’re a real estate…

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Down Valuations on the Rise – What Happens to Your Purchase?

Whether you’re a business owner looking to purchase a new property or remortgage, or you’re a homeowner looking to do the same, a down valuation can come as a nasty surprise.

But what exactly is a down valuation, why do they happen and what can you do about it?

In this blog, we’ll answer the above questions, ensuring you understand everything you need to know about down valuations, both for businesses and individuals.

What is a down valuation?

When you take out a mortgage or remortgage your existing property, there will be a property valuation.

The initial valuation (often provided by you or your estate agent) can be reduced when the surveyor sent by the lender comes to perform a valuation inspection. A surveyor may conclude that your property is actually worth less than the price you have listed on your mortgage application.

Frustratingly, property valuations are growing increasingly inconsistent, and your down valuation can happen months into the property purchase process, slamming the brakes on an already relatively slow process.

Why does this happen?

This happens because lenders want to be confident that the property you’re borrowing money against is worth what you say it is. If not, they may well lose money should you default on your mortgage.

Lenders need to know that a property will cover their costs if it ever needs to be repossessed.

Not only this, but if you’re looking for a buy-to-let mortgage and you’re unable to achieve the level of rent you’ve based your mortgage application on, then you run the risk of falling into arrears – an obvious cause for concern for any lender.

What can happen to your purchase if the property is down valued?

Some property purchases fall through, others don’t. We’ll go into more detail on what you can do to improve the situation later on.

Before we do, here’s an example of what a down valuation might look like: imagine that the property you’re looking to purchase is listed at £600,000, and it requires a 75% loan-to-value ratio (LTV). In this instance, you’ll need to borrow £450,000, with a deposit of £150,000.

The valuation inspection determines that the property is actually only worth £580,000, which means you’ll only be able to get a mortgage for £435,000. In order to get to the listed value of £600,000, you’ll now need to find an extra £15,000 to cover the deficit.

While frustrating, it’s not all bad news, and many property purchases that suffer a down valuation still manage to complete in due course.

Why are down valuations becoming more common?

Even the most competent mortgage advisor/estate agent can find that their valuations are deemed incorrect.

Generally speaking: estate agents are more likely to inflate a property’s value as sellers are more likely to choose them, while lenders’ surveyors are proving more cautious, leading to an increase in down valuations.

It’s par for the course, especially in our current economic climate.

Traditionally, most surveyors broadly agree on property prices, but as interest rates continue to rise, and we’re still reeling from the impacts of the Covid-19 pandemic; it’s no wonder that lenders are on edge.

In fact, more than half of pandemic property purchases in the UK were subject to down valuations (between 2020 and 2022). Despite us being past the worst of the pandemic anxiety, many surveyors are still being careful due to rising interest rates.

What can you do if your property is down valued?

So, the property you’re working on has been down valued, is there anything you can do?

The short answer is yes, and our first tip is potentially the most important:

1. Don’t panic!

It’s very easy to panic when suddenly hit with a down valuation.

However, it’s the nature of the beast, and down valuations can happen to even the most experienced property investors.

Sure, it’s unlucky, but it’s not the end of the world. Keep a level head and it’ll be little more than a bump in the road.

2. Negotiate a lower offer

Depending on the severity of the down valuation, you may choose to negotiate a lower offer with your seller to match the new valuation from the lender. Of course, there’s no guarantee that the seller will accept your new offer, and you may need to seek a middle ground to continue with the property purchase.

3. Increase your deposit

If the down valuation is only slightly below the asking price, you may choose to simply make up the difference to avoid any further delays.

However, if the property has been down valued by a significant amount, the lender may not be happy supporting the purchase, but this will vary from case to case.

4. Change your LTV ratio

If you have yet to apply for the highest possible LTV ratio, now might be the time to do so.

You may be able to increase the amount you’re borrowing in this way (also known as ‘gearing up’). Remember – higher LTVs often result in higher mortgage interest rates, too, so it’s important to weigh up whether the increase in monthly payments is worth it for you.

5. Appeal the down valuation

It’s possible to appeal your down valuation if you feel that it’s unwarranted.

If you want to take this route, you’ll need, at minimum, three examples of similar properties that are close to the property you wish to purchase and have sold for a similar price. This will affirm that the property is worth the value that it’s listed for.

The same principle applies for buy-to-let mortgages – if your monthly rental projections have been down-valued, you can find like-for-like properties in the area which are currently being rented at a level similar to your original predictions.

6. Find a different lender

If you’re partnered with a competent, experienced broker, you’ll be able to shop around for other lenders, many of whom may give the property you’re looking to purchase a more favourable valuation.

While this isn’t guaranteed, your broker may be able to help.

For example, at Rapid Bridging, we’ve built strong relationships with brokers across the UK. We’re able to leverage these relationships on behalf of our clients, which means we can often find a product with lower or no valuation fees.

Whether you’re a homeowner working on a residential purchase, you’re a business looking for a commercial mortgage, or you’re a landlord looking to secure a buy-to-let mortgage, our friendly team are here to help.

Even if you’ve had a property down valued, there’s still processes to follow!

Talk to our friendly team

Bridge Loan,Bridging Loans

What is bridging finance?

There are so many terms floating around in the world of finance that it’s easy, even for a seasoned business owner, to get a little confused about which is which.

One such term, ‘bridging finance’ is a seriously popular one with businesses looking to grow.

Why?

Because bridging finance offers an unparalleled level of flexibility, efficiency and consistency.

So, whether you’re a real estate investor, a business owner, or simply curious about finance, understanding what bridging finance is, and how you can use it to your advantage, is essential.

In this blog we’ll delve into the world of bridging finance, exploring what it is, its purpose and its benefits.

What is bridge financing?

Bridge financing, also known as bridging finance and bridging loans, is a short-term financing option used by businesses to bridge the gap between the need for immediate capital (often for an investment in property) and the availability of long-term financing solutions.

Generally speaking, long-term financing solutions for significant business purchases can, understandably, take a very long time to negotiate (there’s a lot of money at stake, after all!).

Bridging finance provides businesses with immediate access to the capital they need to grow.

How does bridging finance work?

Bridging finance works in much the same way as other finance options, with the difference being that the process is often significantly faster.

Here’s how it works:

Application – Applying for a bridging loan couldn’t be easier, but there are a few key details you’ll need to provide, including the amount needed, details about your business and your proposed repayment plan. A lender will also do a credit check and will value any collateral you offer.
Loan approval – Once your loan is approved, the lender will provide you with an offer letter that outlines the terms and conditions of the loan. This includes the loan amount, interest rate, repayment period, fees, and any specific requirements, such as collateral or guarantees.
Valuation & security – In many cases, bridging finance requires you to provide security or collateral in order to secure the loan. This is often property, land or other valuable assets.
Funds disbursed – Once signed off and your security is verified, you’ll receive your funds. This is often done incredibly quickly, within days or weeks.
Repayment – Typically, bridging loans have a short repayment period, ranging anywhere from a few weeks to 36 months.
Exit strategy – You’ll be expected to have a clear exit strategy in place, which outlines how you will repay your bridging loan. This might be in the form of selling the property, securing long-term financing, or generating funds through other means. This step is essential, as bridging loans aren’t designed to last for a long time.

What are the benefits of bridging finance?

Bridging finance is an incredibly important type of finance, and it is growing in popularity year on year.

It is unique, and has some relatively niche use cases. Business owners are opting to use bridging finance because:

It delivers super speedy funding
It offers highly flexible repayment options
It allows you to bridge financial gaps
It let you seize time-sensitive opportunities
It opens doors to profit-generating activities
It helps you temporarily manage cash flow challenges

While bridging loans generally come with slightly higher interest rates, this is usually mitigated by the short period of the loan.

Despite this, we always recommend talking to bridging loan specialists before you decide to take out a loan. This both ensures you get the best possible deal, while also guaranteeing your loan is in your best interests.

What businesses use bridging finance?

Bridging finance is used by people and businesses across the world, from SMEs to real estate investors, bridging loans are a great way to access the cash you need quickly.

In our time brokering high-quality bridging loans, we’ve seen many uses of bridging loans, including:

Property development

Development bridging loans are a great way for developers to quickly move on to their next project without getting bogged down in the sale of their previous project.

A bridging loan gives you the up-front investment you need to bridge the gap while you sell, meaning you’re far more profitable and efficient in the long term.

Real estate investors

Bridging finance is popular among real estate investors who engage in property flipping or investment projects. It enables them to purchase properties quickly, renovate or enhance their value, and then sell them for a profit.

SMEs

SMEs often turn to bridging finance to address short-term cash flow challenges or to fund growth opportunities. It can be used to cover operating expenses, purchase inventory, invest in marketing campaigns, or seize time-sensitive business opportunities.

Bridging finance provides SMEs with quick access to capital, enabling them to manage temporary financial gaps and sustain business operations.

Retail/hospitality businesses

Businesses in the retail and hospitality sectors may use bridging finance to support their operations during seasonal fluctuations or while waiting for a longer-term financing option.

For example, a hotel or restaurant might require immediate funds to renovate or expand their premises, purchase equipment, or meet increased demand during peak seasons.

Professional services

Professionals such as doctors, lawyers, and accountants who are setting up or expanding their practices may utilise bridging finance to cover the costs of establishing a new office, acquiring equipment, or hiring additional staff.

Bridging finance can provide them with the necessary capital to get their practice up and running before transitioning to a more permanent financing solution.

Secure your bridging finance today

Rapid, efficient, reliable.

Rapid Bridging specialise in getting you the money you need in your pocket as quickly as possible.

We’ve been doing this for over thirty years; we have ongoing relationships with leading lenders, and have streamlined our process to ensure there’s as little stress on you as possible.

Whether you’re after advice on bridging finance, or you’re ready to get started, don’t hesitate to get in touch with our team of specialists today.

Bridge Loan,Bridging Loans

Bridging Loan Criteria – Top 3 Bridging Loan Myths Debunked

Despite these myths, bridging loans have emerged as a popular option for property businesses seeking quick and flexible funding solutions, but why is that? In this blog, we aim to debunk the three most prominent myths surrounding bridging loans, run through the criteria you need to meet in order to be accepted for one, and shed light on the benefits of using bridging loans for residential, commercial, and development property businesses.

Myth #1: Bridging loans are only for desperate borrowers

One common misconception about bridging loans is that they are solely meant for borrowers facing financial difficulties or struggling to secure traditional bank loans. However, this couldn’t be further from the truth. While bridging loans do provide a lifeline for those in urgent need of funding, they are also used by astute property investors and developers to seize lucrative, often time-limited opportunities before they pass by. Because bridging loans have a faster application and approval process, you can have the funding you need in the bank incredibly quickly, perfect for any time-sensitive property investments.

Myth #2: Bridging loans have exorbitant interest rates

Another prevailing myth is that bridging loans come with sky-high interest rates, making them an unaffordable financing option.

While it is true that bridging loans generally have higher interest rates compared to traditional mortgages, it’s important to remember that bridging loans, as the name implies, are meant to bridge the gap between property sales, or finance time-sensitive property development projects.

As a short-term loan, slightly higher interest rates should not be a concern; higher interest rates are simply a reflection of the lender’s risk exposure during this short time period.

In addition, the speed and convenience of bridging loans often outweighs the higher interest costs for borrowers, as immediate access to capital often opens up opportunities that traditional loans may not be able to.

Myth #3: Bridging loans are only for residential properties

Contrary to popular belief, bridging loans are not only used to help purchase residential properties.

They can be used for various types of property purchases, including commercial real estate and development projects.

Whether you’re looking to acquire a new office building, renovate a retail space, or develop residential units, bridging loans are the fastest, and often most cost-effective way to get the funding you need quickly and easily.

Not only this, but bridging loans are versatile and can be customised to suit different property types and financing needs – the possibilities are endless!

What bridging loan criteria do you need to know?

In order to get a bridging loan, you’ll usually need to meet certain criteria set by lenders.
While specifics will vary from lender to lender, the most common bridging loan criteria that you need to consider are:

What’s your exit strategy?

Lenders will want to know that you’ve got a clear plan to either sell, refinance or secure alternative long-term finance. Remember, your bridging loan is short term (often around 36 months), so you’ll need to demonstrate what your plan is following this period.

Have you got security?

Loan security usually comes in the form of property or real estate. A lender will evaluate the value and marketability of any property you offer as security.

What’s the loan-to-value ratio?

Lenders often have a maximum LTV (loan to value), which determines the percentage of the property value that they are willing to lend. Typically, bridging loans can range from 65% to 75% of the property value, which means you’ll need a cash deposit of around 25-35% to secure the loan.

How’s your credit score?

While bridging loans are a more flexible type of finance, you’ll still need a relatively strong credit score to obtain the lowest interest rate, as the lender needs to know you’ll repay the loan! They’ll likely check your credit history, outstanding debts and your overall financial position before giving approval for the lowest rate.

What’s your repayment plan?

Here, a lender will assess your income, cash flow and financial stability. For development projects, they may also look at your track record in property development to see whether you’re a safe bet.

Have you got legal support?

For substantial loans, you’ll need legal representation to handle legal aspects of the loan, such as property valuations, due diligence and documentation.

Are bridging loans a good idea? Here’s some of the key benefits

So, after all this you might be wondering if a bridging loan is right for you. Here’s the four key benefits to bridging loans, designed to help you make the right choice for your unique circumstances:

Speed and flexibility: Bridging loans offer a streamlined application and approval process, while tailored repayment terms and loan structures keep the finance bespoke to your needs.

This speed is particularly advantageous in competitive property markets where time is of the essence.
Bridging the finance gap: Bridging loans are specifically designed to bridge temporary financial gaps, enabling you to proceed with acquisitions, developments, or refurbishments while awaiting longer-term financing or the sale of existing assets.
Property chain flexibility: Nobody wants to endure property chain delays.
If the buyer of your existing property is dragging their heels, a bridging loan can provide the necessary funds for you to crack on with your next project, safe in the knowledge that you can pay it off in full once your sale goes through.
Repayment options: Bridging loans offer various repayment options to suit borrowers’ needs.

Some loans allow for deferred interest payments, which can be beneficial for developers who anticipate that their cash flow will improve once the project is complete.

Other lenders offer flexibility in repayment, enabling you to repay the loan in a lump sum upon the sale or refinancing of the property.

Flexible, reliable bridging loans in the UK

There’s a lot to digest when it comes to bridging loans.
Fortunately, you’re in the right place!

Rapid Bridging are leading the charge in making fast bridging loans reliable and accessible to individuals and organisations across the UK.

Whether you know exactly what you need, and you’re ready to get started, or you need some advice, our specialists are here to guide you every step of the way.

Quick, painless, efficient – what more could you need? Click here to get in touch with a member of the Rapid Bridging team today.

Bridge Loan

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Bridge Loan,Bridging Loans

Down Valuations on the Rise – What Happens to Your Purchase?

Whether you’re a business owner looking to purchase a new property or remortgage, or you’re a homeowner looking to do the same, a down valuation can come as a nasty surprise.

But what exactly is a down valuation, why do they happen and what can you do about it?

In this blog, we’ll answer the above questions, ensuring you understand everything you need to know about down valuations, both for businesses and individuals.

What is a down valuation?

When you take out a mortgage or remortgage your existing property, there will be a property valuation.

The initial valuation (often provided by you or your estate agent) can be reduced when the surveyor sent by the lender comes to perform a valuation inspection. A surveyor may conclude that your property is actually worth less than the price you have listed on your mortgage application.

Frustratingly, property valuations are growing increasingly inconsistent, and your down valuation can happen months into the property purchase process, slamming the brakes on an already relatively slow process.

Why does this happen?

This happens because lenders want to be confident that the property you’re borrowing money against is worth what you say it is. If not, they may well lose money should you default on your mortgage.

Lenders need to know that a property will cover their costs if it ever needs to be repossessed.

Not only this, but if you’re looking for a buy-to-let mortgage and you’re unable to achieve the level of rent you’ve based your mortgage application on, then you run the risk of falling into arrears – an obvious cause for concern for any lender.

What can happen to your purchase if the property is down valued?

Some property purchases fall through, others don’t. We’ll go into more detail on what you can do to improve the situation later on.

Before we do, here’s an example of what a down valuation might look like: imagine that the property you’re looking to purchase is listed at £600,000, and it requires a 75% loan-to-value ratio (LTV). In this instance, you’ll need to borrow £450,000, with a deposit of £150,000.

The valuation inspection determines that the property is actually only worth £580,000, which means you’ll only be able to get a mortgage for £435,000. In order to get to the listed value of £600,000, you’ll now need to find an extra £15,000 to cover the deficit.

While frustrating, it’s not all bad news, and many property purchases that suffer a down valuation still manage to complete in due course.

Why are down valuations becoming more common?

Even the most competent mortgage advisor/estate agent can find that their valuations are deemed incorrect.

Generally speaking: estate agents are more likely to inflate a property’s value as sellers are more likely to choose them, while lenders’ surveyors are proving more cautious, leading to an increase in down valuations.

It’s par for the course, especially in our current economic climate.

Traditionally, most surveyors broadly agree on property prices, but as interest rates continue to rise, and we’re still reeling from the impacts of the Covid-19 pandemic; it’s no wonder that lenders are on edge.

In fact, more than half of pandemic property purchases in the UK were subject to down valuations (between 2020 and 2022). Despite us being past the worst of the pandemic anxiety, many surveyors are still being careful due to rising interest rates.

What can you do if your property is down valued?

So, the property you’re working on has been down valued, is there anything you can do?

The short answer is yes, and our first tip is potentially the most important:

1. Don’t panic!

It’s very easy to panic when suddenly hit with a down valuation.

However, it’s the nature of the beast, and down valuations can happen to even the most experienced property investors.

Sure, it’s unlucky, but it’s not the end of the world. Keep a level head and it’ll be little more than a bump in the road.

2. Negotiate a lower offer

Depending on the severity of the down valuation, you may choose to negotiate a lower offer with your seller to match the new valuation from the lender. Of course, there’s no guarantee that the seller will accept your new offer, and you may need to seek a middle ground to continue with the property purchase.

3. Increase your deposit

If the down valuation is only slightly below the asking price, you may choose to simply make up the difference to avoid any further delays.

However, if the property has been down valued by a significant amount, the lender may not be happy supporting the purchase, but this will vary from case to case.

4. Change your LTV ratio

If you have yet to apply for the highest possible LTV ratio, now might be the time to do so.

You may be able to increase the amount you’re borrowing in this way (also known as ‘gearing up’). Remember – higher LTVs often result in higher mortgage interest rates, too, so it’s important to weigh up whether the increase in monthly payments is worth it for you.

5. Appeal the down valuation

It’s possible to appeal your down valuation if you feel that it’s unwarranted.

If you want to take this route, you’ll need, at minimum, three examples of similar properties that are close to the property you wish to purchase and have sold for a similar price. This will affirm that the property is worth the value that it’s listed for.

The same principle applies for buy-to-let mortgages – if your monthly rental projections have been down-valued, you can find like-for-like properties in the area which are currently being rented at a level similar to your original predictions.

6. Find a different lender

If you’re partnered with a competent, experienced broker, you’ll be able to shop around for other lenders, many of whom may give the property you’re looking to purchase a more favourable valuation.

While this isn’t guaranteed, your broker may be able to help.

For example, at Rapid Bridging, we’ve built strong relationships with brokers across the UK. We’re able to leverage these relationships on behalf of our clients, which means we can often find a product with lower or no valuation fees.

Whether you’re a homeowner working on a residential purchase, you’re a business looking for a commercial mortgage, or you’re a landlord looking to secure a buy-to-let mortgage, our friendly team are here to help.

Even if you’ve had a property down valued, there’s still processes to follow!

Talk to our friendly team

Bridge Loan,Bridging Loans

What is bridging finance?

There are so many terms floating around in the world of finance that it’s easy, even for a seasoned business owner, to get a little confused about which is which.

One such term, ‘bridging finance’ is a seriously popular one with businesses looking to grow.

Why?

Because bridging finance offers an unparalleled level of flexibility, efficiency and consistency.

So, whether you’re a real estate investor, a business owner, or simply curious about finance, understanding what bridging finance is, and how you can use it to your advantage, is essential.

In this blog we’ll delve into the world of bridging finance, exploring what it is, its purpose and its benefits.

What is bridge financing?

Bridge financing, also known as bridging finance and bridging loans, is a short-term financing option used by businesses to bridge the gap between the need for immediate capital (often for an investment in property) and the availability of long-term financing solutions.

Generally speaking, long-term financing solutions for significant business purchases can, understandably, take a very long time to negotiate (there’s a lot of money at stake, after all!).

Bridging finance provides businesses with immediate access to the capital they need to grow.

How does bridging finance work?

Bridging finance works in much the same way as other finance options, with the difference being that the process is often significantly faster.

Here’s how it works:

Application – Applying for a bridging loan couldn’t be easier, but there are a few key details you’ll need to provide, including the amount needed, details about your business and your proposed repayment plan. A lender will also do a credit check and will value any collateral you offer.
Loan approval – Once your loan is approved, the lender will provide you with an offer letter that outlines the terms and conditions of the loan. This includes the loan amount, interest rate, repayment period, fees, and any specific requirements, such as collateral or guarantees.
Valuation & security – In many cases, bridging finance requires you to provide security or collateral in order to secure the loan. This is often property, land or other valuable assets.
Funds disbursed – Once signed off and your security is verified, you’ll receive your funds. This is often done incredibly quickly, within days or weeks.
Repayment – Typically, bridging loans have a short repayment period, ranging anywhere from a few weeks to 36 months.
Exit strategy – You’ll be expected to have a clear exit strategy in place, which outlines how you will repay your bridging loan. This might be in the form of selling the property, securing long-term financing, or generating funds through other means. This step is essential, as bridging loans aren’t designed to last for a long time.

What are the benefits of bridging finance?

Bridging finance is an incredibly important type of finance, and it is growing in popularity year on year.

It is unique, and has some relatively niche use cases. Business owners are opting to use bridging finance because:

It delivers super speedy funding
It offers highly flexible repayment options
It allows you to bridge financial gaps
It let you seize time-sensitive opportunities
It opens doors to profit-generating activities
It helps you temporarily manage cash flow challenges

While bridging loans generally come with slightly higher interest rates, this is usually mitigated by the short period of the loan.

Despite this, we always recommend talking to bridging loan specialists before you decide to take out a loan. This both ensures you get the best possible deal, while also guaranteeing your loan is in your best interests.

What businesses use bridging finance?

Bridging finance is used by people and businesses across the world, from SMEs to real estate investors, bridging loans are a great way to access the cash you need quickly.

In our time brokering high-quality bridging loans, we’ve seen many uses of bridging loans, including:

Property development

Development bridging loans are a great way for developers to quickly move on to their next project without getting bogged down in the sale of their previous project.

A bridging loan gives you the up-front investment you need to bridge the gap while you sell, meaning you’re far more profitable and efficient in the long term.

Real estate investors

Bridging finance is popular among real estate investors who engage in property flipping or investment projects. It enables them to purchase properties quickly, renovate or enhance their value, and then sell them for a profit.

SMEs

SMEs often turn to bridging finance to address short-term cash flow challenges or to fund growth opportunities. It can be used to cover operating expenses, purchase inventory, invest in marketing campaigns, or seize time-sensitive business opportunities.

Bridging finance provides SMEs with quick access to capital, enabling them to manage temporary financial gaps and sustain business operations.

Retail/hospitality businesses

Businesses in the retail and hospitality sectors may use bridging finance to support their operations during seasonal fluctuations or while waiting for a longer-term financing option.

For example, a hotel or restaurant might require immediate funds to renovate or expand their premises, purchase equipment, or meet increased demand during peak seasons.

Professional services

Professionals such as doctors, lawyers, and accountants who are setting up or expanding their practices may utilise bridging finance to cover the costs of establishing a new office, acquiring equipment, or hiring additional staff.

Bridging finance can provide them with the necessary capital to get their practice up and running before transitioning to a more permanent financing solution.

Secure your bridging finance today

Rapid, efficient, reliable.

Rapid Bridging specialise in getting you the money you need in your pocket as quickly as possible.

We’ve been doing this for over thirty years; we have ongoing relationships with leading lenders, and have streamlined our process to ensure there’s as little stress on you as possible.

Whether you’re after advice on bridging finance, or you’re ready to get started, don’t hesitate to get in touch with our team of specialists today.

Bridge Loan,Bridging Loans

Bridging Loan Criteria – Top 3 Bridging Loan Myths Debunked

Despite these myths, bridging loans have emerged as a popular option for property businesses seeking quick and flexible funding solutions, but why is that? In this blog, we aim to debunk the three most prominent myths surrounding bridging loans, run through the criteria you need to meet in order to be accepted for one, and shed light on the benefits of using bridging loans for residential, commercial, and development property businesses.

Myth #1: Bridging loans are only for desperate borrowers

One common misconception about bridging loans is that they are solely meant for borrowers facing financial difficulties or struggling to secure traditional bank loans. However, this couldn’t be further from the truth. While bridging loans do provide a lifeline for those in urgent need of funding, they are also used by astute property investors and developers to seize lucrative, often time-limited opportunities before they pass by. Because bridging loans have a faster application and approval process, you can have the funding you need in the bank incredibly quickly, perfect for any time-sensitive property investments.

Myth #2: Bridging loans have exorbitant interest rates

Another prevailing myth is that bridging loans come with sky-high interest rates, making them an unaffordable financing option.

While it is true that bridging loans generally have higher interest rates compared to traditional mortgages, it’s important to remember that bridging loans, as the name implies, are meant to bridge the gap between property sales, or finance time-sensitive property development projects.

As a short-term loan, slightly higher interest rates should not be a concern; higher interest rates are simply a reflection of the lender’s risk exposure during this short time period.

In addition, the speed and convenience of bridging loans often outweighs the higher interest costs for borrowers, as immediate access to capital often opens up opportunities that traditional loans may not be able to.

Myth #3: Bridging loans are only for residential properties

Contrary to popular belief, bridging loans are not only used to help purchase residential properties.

They can be used for various types of property purchases, including commercial real estate and development projects.

Whether you’re looking to acquire a new office building, renovate a retail space, or develop residential units, bridging loans are the fastest, and often most cost-effective way to get the funding you need quickly and easily.

Not only this, but bridging loans are versatile and can be customised to suit different property types and financing needs – the possibilities are endless!

What bridging loan criteria do you need to know?

In order to get a bridging loan, you’ll usually need to meet certain criteria set by lenders.
While specifics will vary from lender to lender, the most common bridging loan criteria that you need to consider are:

What’s your exit strategy?

Lenders will want to know that you’ve got a clear plan to either sell, refinance or secure alternative long-term finance. Remember, your bridging loan is short term (often around 36 months), so you’ll need to demonstrate what your plan is following this period.

Have you got security?

Loan security usually comes in the form of property or real estate. A lender will evaluate the value and marketability of any property you offer as security.

What’s the loan-to-value ratio?

Lenders often have a maximum LTV (loan to value), which determines the percentage of the property value that they are willing to lend. Typically, bridging loans can range from 65% to 75% of the property value, which means you’ll need a cash deposit of around 25-35% to secure the loan.

How’s your credit score?

While bridging loans are a more flexible type of finance, you’ll still need a relatively strong credit score to obtain the lowest interest rate, as the lender needs to know you’ll repay the loan! They’ll likely check your credit history, outstanding debts and your overall financial position before giving approval for the lowest rate.

What’s your repayment plan?

Here, a lender will assess your income, cash flow and financial stability. For development projects, they may also look at your track record in property development to see whether you’re a safe bet.

Have you got legal support?

For substantial loans, you’ll need legal representation to handle legal aspects of the loan, such as property valuations, due diligence and documentation.

Are bridging loans a good idea? Here’s some of the key benefits

So, after all this you might be wondering if a bridging loan is right for you. Here’s the four key benefits to bridging loans, designed to help you make the right choice for your unique circumstances:

Speed and flexibility: Bridging loans offer a streamlined application and approval process, while tailored repayment terms and loan structures keep the finance bespoke to your needs.

This speed is particularly advantageous in competitive property markets where time is of the essence.
Bridging the finance gap: Bridging loans are specifically designed to bridge temporary financial gaps, enabling you to proceed with acquisitions, developments, or refurbishments while awaiting longer-term financing or the sale of existing assets.
Property chain flexibility: Nobody wants to endure property chain delays.
If the buyer of your existing property is dragging their heels, a bridging loan can provide the necessary funds for you to crack on with your next project, safe in the knowledge that you can pay it off in full once your sale goes through.
Repayment options: Bridging loans offer various repayment options to suit borrowers’ needs.

Some loans allow for deferred interest payments, which can be beneficial for developers who anticipate that their cash flow will improve once the project is complete.

Other lenders offer flexibility in repayment, enabling you to repay the loan in a lump sum upon the sale or refinancing of the property.

Flexible, reliable bridging loans in the UK

There’s a lot to digest when it comes to bridging loans.
Fortunately, you’re in the right place!

Rapid Bridging are leading the charge in making fast bridging loans reliable and accessible to individuals and organisations across the UK.

Whether you know exactly what you need, and you’re ready to get started, or you need some advice, our specialists are here to guide you every step of the way.

Quick, painless, efficient – what more could you need? Click here to get in touch with a member of the Rapid Bridging team today.

Bridge Loan

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Loans

Can You Get a Bridge Loan with Bad Credit?

When financial challenges arise and you find yourself in need of quick funds, bridge loans can be a viable solution. They can help to bridge the gap between a pressing financial need and a more permanent financial solution.

However, for those who have less-than-stellar credit, the question that springs to mind is can you secure a bridge loan with a poor credit score?

In this blog, we explore the options available for individuals who might find themselves in this situation.

Understanding bridging loans

Before we dive into the discussion about bad credit scores and bridge loans, it can help to clarify what a bridge loan is.

A bridge loan, often known as a gap loan or interim financing is a short-term loan used to bridge a financial gap.

The loans are typically utilised when someone needs immediate funding but is waiting for other long-term financing to come through. For example, you may need a bridge loan when buying a new home, while waiting for the sale of your existing one to finalise.

The role of credit scores

The reason why your credit score plays such a significant role in your application for any type of loan is that lenders often review them to determine whether you are a reliable borrower.

This typically involves assessing your ability to repay the loan and the impact of the loan on your financial stability.

A high credit score typically indicates a lower-risk borrower, while a lower score might raise concerns for lenders, as you are at a higher risk of defaulting on the loan.

The impact of bankruptcy

Now let’s address the elephant in the room: bankruptcy. If you’ve filed for bankruptcy, it can have a significant impact on your credit score. Bankruptcy remains on your credit report for six to seven years. During this period, your credit score is likely to be adversely affected.

Securing a bridge loan with bad credit

For individuals with bad credit, securing a bridge loan can be a challenge. Bad credit may be a result of past financial missteps, such as late payments, defaults, or bankruptcy, which naturally makes lenders hesitant to accept your application.

However, it’s important to note that not all lenders have the same strict criteria. Some specialise in working with borrowers who have imperfect credit histories.

So can you still secure a bridge loan with bad credit, even after bankruptcy?

The answer is yes, but you’ll likely encounter some limitations. These include:

Higher interest rates

Lenders may offer bridge loans to individuals with bad credit, but they often compensate for the increased risk by charging higher interest rates.

Shorter terms

Bad credit bridge loans might come with shorter repayment terms. This means you’ll need to repay the loan quicker, which can potentially put more financial strain on you.

Loan-to-value

Lenders may be more willing to approve a bridge loan if you have substantial collateral, such as properties or savings that can cover the loan amount. This collateral can offset the risk associated with bad credit.

Private lenders

Consider exploring private lenders or alternative financing options. These lenders might have more lenient credit requirements compared to traditional banks.

Improving your chances

While getting a bridge loan with bad credit is possible, it’s essential to work on improving your creditworthiness over time. You can do this by paying your bills on time, reducing outstanding debt, and carefully managing your finances.

Improving your credit score isn’t something that can magically happen overnight but it’s worth starting the process as soon as you can.

As your credit score improves, you’ll have access to more favourable loan terms in the future.

Bridging Loans from Rapid Bridging

With the right approach, a bridge loan can serve as a valuable tool in achieving your financial goals. To find out how Rapid Bridging can help you secure the funding you need, get in touch with our team of experts today.

Finance

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Down Valuations on the Rise – What Happens to Your Purchase?

18 June 2024

Whether you’re a business owner looking to purchase a new property or remortgage, or you’re a homeowner looking to do the same, a down valuation

Can You Get a Bridge Loan with Bad Credit?

18 June 2024

When financial challenges arise and you find yourself in need of quick funds, bridge loans can be a viable solution. They can help to bridge the

What is bridging finance?

18 June 2024

There are so many terms floating around in the world of finance that it’s easy, even for a seasoned business owner, to get a little

Client testimonials

Would definitely recommend. Seamless transition and easy to deal with.

Professional company, with specialist knowledge. Help me with a very complex financial situation. Would highly recommend.

Any credit offered is subject to an assessment of your financial circumstances and or status. Loans can also be accessed on a non-status basis.

Professional company, with specialist knowledge. Help me with a very complex financial situation. Would highly recommend.

Don’t just take our word for it

The relationships we build with our customers are incredibly important to us. Hear what they have to say, and learn why people across the UK rely on Rapid Bridging time and time again.

“Andrews nature and experience allowed for him to cut through some problems that we found with the other professionals. IE the solicitors and the banks”

ALAN OVERTON

“We were unable to get a loan anywhere. Nobody would fund building the house. We then approached Andrew who was unbelievably helpful. He was the only person who would even entertain the idea of trying to help”

PETER TILLET

“Without Andrew, I would’ve lost the property. This would’ve caused no end of issues not just personally but for my business as well. Without Andrew and these services, I would’ve lost everything”

ADAM LINFORD

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Bridge Loan,Bridging Loans

Down Valuations on the Rise – What Happens to Your Purchase?

Whether you’re a business owner looking to purchase a new property or remortgage, or you’re a homeowner looking to do the same, a down valuation can come as a nasty surprise.

But what exactly is a down valuation, why do they happen and what can you do about it?

In this blog, we’ll answer the above questions, ensuring you understand everything you need to know about down valuations, both for businesses and individuals.

What is a down valuation?

When you take out a mortgage or remortgage your existing property, there will be a property valuation.

The initial valuation (often provided by you or your estate agent) can be reduced when the surveyor sent by the lender comes to perform a valuation inspection. A surveyor may conclude that your property is actually worth less than the price you have listed on your mortgage application.

Frustratingly, property valuations are growing increasingly inconsistent, and your down valuation can happen months into the property purchase process, slamming the brakes on an already relatively slow process.

Why does this happen?

This happens because lenders want to be confident that the property you’re borrowing money against is worth what you say it is. If not, they may well lose money should you default on your mortgage.

Lenders need to know that a property will cover their costs if it ever needs to be repossessed.

Not only this, but if you’re looking for a buy-to-let mortgage and you’re unable to achieve the level of rent you’ve based your mortgage application on, then you run the risk of falling into arrears – an obvious cause for concern for any lender.

What can happen to your purchase if the property is down valued?

Some property purchases fall through, others don’t. We’ll go into more detail on what you can do to improve the situation later on.

Before we do, here’s an example of what a down valuation might look like: imagine that the property you’re looking to purchase is listed at £600,000, and it requires a 75% loan-to-value ratio (LTV). In this instance, you’ll need to borrow £450,000, with a deposit of £150,000.

The valuation inspection determines that the property is actually only worth £580,000, which means you’ll only be able to get a mortgage for £435,000. In order to get to the listed value of £600,000, you’ll now need to find an extra £15,000 to cover the deficit.

While frustrating, it’s not all bad news, and many property purchases that suffer a down valuation still manage to complete in due course.

Why are down valuations becoming more common?

Even the most competent mortgage advisor/estate agent can find that their valuations are deemed incorrect.

Generally speaking: estate agents are more likely to inflate a property’s value as sellers are more likely to choose them, while lenders’ surveyors are proving more cautious, leading to an increase in down valuations.

It’s par for the course, especially in our current economic climate.

Traditionally, most surveyors broadly agree on property prices, but as interest rates continue to rise, and we’re still reeling from the impacts of the Covid-19 pandemic; it’s no wonder that lenders are on edge.

In fact, more than half of pandemic property purchases in the UK were subject to down valuations (between 2020 and 2022). Despite us being past the worst of the pandemic anxiety, many surveyors are still being careful due to rising interest rates.

What can you do if your property is down valued?

So, the property you’re working on has been down valued, is there anything you can do?

The short answer is yes, and our first tip is potentially the most important:

1. Don’t panic!

It’s very easy to panic when suddenly hit with a down valuation.

However, it’s the nature of the beast, and down valuations can happen to even the most experienced property investors.

Sure, it’s unlucky, but it’s not the end of the world. Keep a level head and it’ll be little more than a bump in the road.

2. Negotiate a lower offer

Depending on the severity of the down valuation, you may choose to negotiate a lower offer with your seller to match the new valuation from the lender. Of course, there’s no guarantee that the seller will accept your new offer, and you may need to seek a middle ground to continue with the property purchase.

3. Increase your deposit

If the down valuation is only slightly below the asking price, you may choose to simply make up the difference to avoid any further delays.

However, if the property has been down valued by a significant amount, the lender may not be happy supporting the purchase, but this will vary from case to case.

4. Change your LTV ratio

If you have yet to apply for the highest possible LTV ratio, now might be the time to do so.

You may be able to increase the amount you’re borrowing in this way (also known as ‘gearing up’). Remember – higher LTVs often result in higher mortgage interest rates, too, so it’s important to weigh up whether the increase in monthly payments is worth it for you.

5. Appeal the down valuation

It’s possible to appeal your down valuation if you feel that it’s unwarranted.

If you want to take this route, you’ll need, at minimum, three examples of similar properties that are close to the property you wish to purchase and have sold for a similar price. This will affirm that the property is worth the value that it’s listed for.

The same principle applies for buy-to-let mortgages – if your monthly rental projections have been down-valued, you can find like-for-like properties in the area which are currently being rented at a level similar to your original predictions.

6. Find a different lender

If you’re partnered with a competent, experienced broker, you’ll be able to shop around for other lenders, many of whom may give the property you’re looking to purchase a more favourable valuation.

While this isn’t guaranteed, your broker may be able to help.

For example, at Rapid Bridging, we’ve built strong relationships with brokers across the UK. We’re able to leverage these relationships on behalf of our clients, which means we can often find a product with lower or no valuation fees.

Whether you’re a homeowner working on a residential purchase, you’re a business looking for a commercial mortgage, or you’re a landlord looking to secure a buy-to-let mortgage, our friendly team are here to help.

Even if you’ve had a property down valued, there’s still processes to follow!

Talk to our friendly team

Loans

Can You Get a Bridge Loan with Bad Credit?

When financial challenges arise and you find yourself in need of quick funds, bridge loans can be a viable solution. They can help to bridge the gap between a pressing financial need and a more permanent financial solution.

However, for those who have less-than-stellar credit, the question that springs to mind is can you secure a bridge loan with a poor credit score?

In this blog, we explore the options available for individuals who might find themselves in this situation.

Understanding bridging loans

Before we dive into the discussion about bad credit scores and bridge loans, it can help to clarify what a bridge loan is.

A bridge loan, often known as a gap loan or interim financing is a short-term loan used to bridge a financial gap.

The loans are typically utilised when someone needs immediate funding but is waiting for other long-term financing to come through. For example, you may need a bridge loan when buying a new home, while waiting for the sale of your existing one to finalise.

The role of credit scores

The reason why your credit score plays such a significant role in your application for any type of loan is that lenders often review them to determine whether you are a reliable borrower.

This typically involves assessing your ability to repay the loan and the impact of the loan on your financial stability.

A high credit score typically indicates a lower-risk borrower, while a lower score might raise concerns for lenders, as you are at a higher risk of defaulting on the loan.

The impact of bankruptcy

Now let’s address the elephant in the room: bankruptcy. If you’ve filed for bankruptcy, it can have a significant impact on your credit score. Bankruptcy remains on your credit report for six to seven years. During this period, your credit score is likely to be adversely affected.

Securing a bridge loan with bad credit

For individuals with bad credit, securing a bridge loan can be a challenge. Bad credit may be a result of past financial missteps, such as late payments, defaults, or bankruptcy, which naturally makes lenders hesitant to accept your application.

However, it’s important to note that not all lenders have the same strict criteria. Some specialise in working with borrowers who have imperfect credit histories.

So can you still secure a bridge loan with bad credit, even after bankruptcy?

The answer is yes, but you’ll likely encounter some limitations. These include:

Higher interest rates

Lenders may offer bridge loans to individuals with bad credit, but they often compensate for the increased risk by charging higher interest rates.

Shorter terms

Bad credit bridge loans might come with shorter repayment terms. This means you’ll need to repay the loan quicker, which can potentially put more financial strain on you.

Loan-to-value

Lenders may be more willing to approve a bridge loan if you have substantial collateral, such as properties or savings that can cover the loan amount. This collateral can offset the risk associated with bad credit.

Private lenders

Consider exploring private lenders or alternative financing options. These lenders might have more lenient credit requirements compared to traditional banks.

Improving your chances

While getting a bridge loan with bad credit is possible, it’s essential to work on improving your creditworthiness over time. You can do this by paying your bills on time, reducing outstanding debt, and carefully managing your finances.

Improving your credit score isn’t something that can magically happen overnight but it’s worth starting the process as soon as you can.

As your credit score improves, you’ll have access to more favourable loan terms in the future.

Bridging Loans from Rapid Bridging

With the right approach, a bridge loan can serve as a valuable tool in achieving your financial goals. To find out how Rapid Bridging can help you secure the funding you need, get in touch with our team of experts today.

Bridge Loan,Bridging Loans

What is bridging finance?

There are so many terms floating around in the world of finance that it’s easy, even for a seasoned business owner, to get a little confused about which is which.

One such term, ‘bridging finance’ is a seriously popular one with businesses looking to grow.

Why?

Because bridging finance offers an unparalleled level of flexibility, efficiency and consistency.

So, whether you’re a real estate investor, a business owner, or simply curious about finance, understanding what bridging finance is, and how you can use it to your advantage, is essential.

In this blog we’ll delve into the world of bridging finance, exploring what it is, its purpose and its benefits.

What is bridge financing?

Bridge financing, also known as bridging finance and bridging loans, is a short-term financing option used by businesses to bridge the gap between the need for immediate capital (often for an investment in property) and the availability of long-term financing solutions.

Generally speaking, long-term financing solutions for significant business purchases can, understandably, take a very long time to negotiate (there’s a lot of money at stake, after all!).

Bridging finance provides businesses with immediate access to the capital they need to grow.

How does bridging finance work?

Bridging finance works in much the same way as other finance options, with the difference being that the process is often significantly faster.

Here’s how it works:

Application – Applying for a bridging loan couldn’t be easier, but there are a few key details you’ll need to provide, including the amount needed, details about your business and your proposed repayment plan. A lender will also do a credit check and will value any collateral you offer.
Loan approval – Once your loan is approved, the lender will provide you with an offer letter that outlines the terms and conditions of the loan. This includes the loan amount, interest rate, repayment period, fees, and any specific requirements, such as collateral or guarantees.
Valuation & security – In many cases, bridging finance requires you to provide security or collateral in order to secure the loan. This is often property, land or other valuable assets.
Funds disbursed – Once signed off and your security is verified, you’ll receive your funds. This is often done incredibly quickly, within days or weeks.
Repayment – Typically, bridging loans have a short repayment period, ranging anywhere from a few weeks to 36 months.
Exit strategy – You’ll be expected to have a clear exit strategy in place, which outlines how you will repay your bridging loan. This might be in the form of selling the property, securing long-term financing, or generating funds through other means. This step is essential, as bridging loans aren’t designed to last for a long time.

What are the benefits of bridging finance?

Bridging finance is an incredibly important type of finance, and it is growing in popularity year on year.

It is unique, and has some relatively niche use cases. Business owners are opting to use bridging finance because:

It delivers super speedy funding
It offers highly flexible repayment options
It allows you to bridge financial gaps
It let you seize time-sensitive opportunities
It opens doors to profit-generating activities
It helps you temporarily manage cash flow challenges

While bridging loans generally come with slightly higher interest rates, this is usually mitigated by the short period of the loan.

Despite this, we always recommend talking to bridging loan specialists before you decide to take out a loan. This both ensures you get the best possible deal, while also guaranteeing your loan is in your best interests.

What businesses use bridging finance?

Bridging finance is used by people and businesses across the world, from SMEs to real estate investors, bridging loans are a great way to access the cash you need quickly.

In our time brokering high-quality bridging loans, we’ve seen many uses of bridging loans, including:

Property development

Development bridging loans are a great way for developers to quickly move on to their next project without getting bogged down in the sale of their previous project.

A bridging loan gives you the up-front investment you need to bridge the gap while you sell, meaning you’re far more profitable and efficient in the long term.

Real estate investors

Bridging finance is popular among real estate investors who engage in property flipping or investment projects. It enables them to purchase properties quickly, renovate or enhance their value, and then sell them for a profit.

SMEs

SMEs often turn to bridging finance to address short-term cash flow challenges or to fund growth opportunities. It can be used to cover operating expenses, purchase inventory, invest in marketing campaigns, or seize time-sensitive business opportunities.

Bridging finance provides SMEs with quick access to capital, enabling them to manage temporary financial gaps and sustain business operations.

Retail/hospitality businesses

Businesses in the retail and hospitality sectors may use bridging finance to support their operations during seasonal fluctuations or while waiting for a longer-term financing option.

For example, a hotel or restaurant might require immediate funds to renovate or expand their premises, purchase equipment, or meet increased demand during peak seasons.

Professional services

Professionals such as doctors, lawyers, and accountants who are setting up or expanding their practices may utilise bridging finance to cover the costs of establishing a new office, acquiring equipment, or hiring additional staff.

Bridging finance can provide them with the necessary capital to get their practice up and running before transitioning to a more permanent financing solution.

Secure your bridging finance today

Rapid, efficient, reliable.

Rapid Bridging specialise in getting you the money you need in your pocket as quickly as possible.

We’ve been doing this for over thirty years; we have ongoing relationships with leading lenders, and have streamlined our process to ensure there’s as little stress on you as possible.

Whether you’re after advice on bridging finance, or you’re ready to get started, don’t hesitate to get in touch with our team of specialists today.

Bridge Loan,Bridging Loans

Bridging Loan Criteria – Top 3 Bridging Loan Myths Debunked

Despite these myths, bridging loans have emerged as a popular option for property businesses seeking quick and flexible funding solutions, but why is that? In this blog, we aim to debunk the three most prominent myths surrounding bridging loans, run through the criteria you need to meet in order to be accepted for one, and shed light on the benefits of using bridging loans for residential, commercial, and development property businesses.

Myth #1: Bridging loans are only for desperate borrowers

One common misconception about bridging loans is that they are solely meant for borrowers facing financial difficulties or struggling to secure traditional bank loans. However, this couldn’t be further from the truth. While bridging loans do provide a lifeline for those in urgent need of funding, they are also used by astute property investors and developers to seize lucrative, often time-limited opportunities before they pass by. Because bridging loans have a faster application and approval process, you can have the funding you need in the bank incredibly quickly, perfect for any time-sensitive property investments.

Myth #2: Bridging loans have exorbitant interest rates

Another prevailing myth is that bridging loans come with sky-high interest rates, making them an unaffordable financing option.

While it is true that bridging loans generally have higher interest rates compared to traditional mortgages, it’s important to remember that bridging loans, as the name implies, are meant to bridge the gap between property sales, or finance time-sensitive property development projects.

As a short-term loan, slightly higher interest rates should not be a concern; higher interest rates are simply a reflection of the lender’s risk exposure during this short time period.

In addition, the speed and convenience of bridging loans often outweighs the higher interest costs for borrowers, as immediate access to capital often opens up opportunities that traditional loans may not be able to.

Myth #3: Bridging loans are only for residential properties

Contrary to popular belief, bridging loans are not only used to help purchase residential properties.

They can be used for various types of property purchases, including commercial real estate and development projects.

Whether you’re looking to acquire a new office building, renovate a retail space, or develop residential units, bridging loans are the fastest, and often most cost-effective way to get the funding you need quickly and easily.

Not only this, but bridging loans are versatile and can be customised to suit different property types and financing needs – the possibilities are endless!

What bridging loan criteria do you need to know?

In order to get a bridging loan, you’ll usually need to meet certain criteria set by lenders.
While specifics will vary from lender to lender, the most common bridging loan criteria that you need to consider are:

What’s your exit strategy?

Lenders will want to know that you’ve got a clear plan to either sell, refinance or secure alternative long-term finance. Remember, your bridging loan is short term (often around 36 months), so you’ll need to demonstrate what your plan is following this period.

Have you got security?

Loan security usually comes in the form of property or real estate. A lender will evaluate the value and marketability of any property you offer as security.

What’s the loan-to-value ratio?

Lenders often have a maximum LTV (loan to value), which determines the percentage of the property value that they are willing to lend. Typically, bridging loans can range from 65% to 75% of the property value, which means you’ll need a cash deposit of around 25-35% to secure the loan.

How’s your credit score?

While bridging loans are a more flexible type of finance, you’ll still need a relatively strong credit score to obtain the lowest interest rate, as the lender needs to know you’ll repay the loan! They’ll likely check your credit history, outstanding debts and your overall financial position before giving approval for the lowest rate.

What’s your repayment plan?

Here, a lender will assess your income, cash flow and financial stability. For development projects, they may also look at your track record in property development to see whether you’re a safe bet.

Have you got legal support?

For substantial loans, you’ll need legal representation to handle legal aspects of the loan, such as property valuations, due diligence and documentation.

Are bridging loans a good idea? Here’s some of the key benefits

So, after all this you might be wondering if a bridging loan is right for you. Here’s the four key benefits to bridging loans, designed to help you make the right choice for your unique circumstances:

Speed and flexibility: Bridging loans offer a streamlined application and approval process, while tailored repayment terms and loan structures keep the finance bespoke to your needs.

This speed is particularly advantageous in competitive property markets where time is of the essence.
Bridging the finance gap: Bridging loans are specifically designed to bridge temporary financial gaps, enabling you to proceed with acquisitions, developments, or refurbishments while awaiting longer-term financing or the sale of existing assets.
Property chain flexibility: Nobody wants to endure property chain delays.
If the buyer of your existing property is dragging their heels, a bridging loan can provide the necessary funds for you to crack on with your next project, safe in the knowledge that you can pay it off in full once your sale goes through.
Repayment options: Bridging loans offer various repayment options to suit borrowers’ needs.

Some loans allow for deferred interest payments, which can be beneficial for developers who anticipate that their cash flow will improve once the project is complete.

Other lenders offer flexibility in repayment, enabling you to repay the loan in a lump sum upon the sale or refinancing of the property.

Flexible, reliable bridging loans in the UK

There’s a lot to digest when it comes to bridging loans.
Fortunately, you’re in the right place!

Rapid Bridging are leading the charge in making fast bridging loans reliable and accessible to individuals and organisations across the UK.

Whether you know exactly what you need, and you’re ready to get started, or you need some advice, our specialists are here to guide you every step of the way.

Quick, painless, efficient – what more could you need? Click here to get in touch with a member of the Rapid Bridging team today.