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Choosing a UK Bridging Finance Lender

Expert advice on choosing the right bridge loan lender for you - looking at the criteria and policies that will impact your decision.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
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Choosing a UK Bridging Finance Lender

Lending brokers can make finding the right finance a streamlined, fast option. The key is to choose an independent, whole-of-market broker like the Revolution Broker team.

Being whole-of-market means that we aren't tied to any banks or lenders, and can offer any product that we think best suits your funding needs.

As bridge loan experts, we negotiate terms on your behalf, help prepare an appealing application, and identify the lenders most able to approve your application.

To get started with your bridging finance application, contact business finance broker on 0330 304 3040, or email us at [email protected].

What Should I Look for in Bridging Finance Lenders?

Most applicants choose bridging finance because they need funding quickly, or need to finance a project outside of the scope of a traditional mortgage.

There are lots of things to consider when choosing which lender to apply to:

  • Terms are substantially different between lenders.
  • Interest rates, arrangement fees and exit charges can also vary considerably.
  • Most bridge loans run from anything from one month up to two years.
  • You can get a 100% bridge loan, but only if you can offer additional security.
  • The typical Loan to Value ratio is capped at 70% or 75%.
  • Many lenders will require evidence of previous development experience.

If you fall outside of any of those standard terms, it is vital to consult a broker who can negotiate with more flexible lenders on your behalf.

  • Property Details
  • Type of loan
  • help Maximum 75% LTV
  • help Maximum 70% LTV
  • help Maximum 70% LTV
  • help Maximum 65% LTV
  • help We will lend against current market value of the asset with vacant possession

  • £7,500,000
    help You cannot exceed the maximum loan available based on the maximum LTV for the corresponding type of property selected above
  • 75%
    help You cannot exceed the maximum LTV available for the corresponding type of property selected above

  • 0
  • help Term should be entered in whole months, to a maximum of 12

  • help Deducted interest is where the forecast interest amount is deducted from the loan on day one.
  • help Serviced interest is where the interest is paid on a monthly basis. If serviced interest is chosen, evidence will be required to show your ability to pay interest when it is due.
  • help This is the standard rate for the property type chosen
  • help You can enter a custom rate below our standard rate for the calculation, but the availability of this rate is not guaranteed
Instant Results
Total security value 0
Gross loan amount 0
Gross LTV 0
Interest rate 0
Term (months) 0
Minimum term (months) 0
Assumed arrangement fee @ 2% (min £2,000) 0
Interest Retained 0
Monthly Serviced Interest 0
Admin fee 0
Indicative day 1 Net loan advance 0
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How Can I Choose the Best Lender for a UK Bridge Loan?

Most lenders assess every bridge loan application on a case-by-case basis, so it isn't always obvious who offers the most competitive rates.

The best option is to appoint an experienced broker who can identify the right lenders, and take a view as to who is most likely to approve your loan against their eligibility criteria.

Some of the best bridge loan deals are available only through brokers and are not available directly to the public.

Applying to the wrong lender can cause further problems, delay your access to lending, and leave marks on your credit file.

Which UK Banks Offer Bridging Loans?

Lots of banks and financiers offer bridging loans, but the terms and rates available will vary.

  • Greenfield Capital offers LTV caps of 70% for loans up to a year, with a minimum value of £25,000. The arrangements fees are steep at 2%.
  • HSBC only offers bridge loans to existing customers in Hong Kong, without a comparable UK product.
  • Lloyds Bank offers bridge loans for clients who wish to finance a new home purchase while waiting for their existing property to sell. Products include open and closed loans with fixed repayment dates. There are also self-build mortgage options for residential property build projects.
  • Masthaven offers bridge loans up to 70% LTV on a first charge basis and up to 65% on a second charge. Terms are available from one month up to a year and a half.
  • Oblix Capital provides bridge loans up to 75% LTV on first charges and up to 65% on second charges, with a maximum term of one year.
  • Precise Mortgages offer bridge finance mortgages with minimum caps of £50,000 or over £25,000 for commercial bridge finance.
  • Shawbrook has a bridging loan finance product, with terms up to two years maximum, at a minimum value of £50,000, and capped at 75% LTV.

Are Specialist Bridging Finance Lenders UK Better Than a High Street Bank?

Unfortunately many UK high street banks only offer this type of lending to existing clients with a high net worth, and it's often far more preferable to use a niche lender with a range of flexible bridge finance products than a mainstream bank.

Other banks will offer a bridging loan, but will not advertise these, or seek new clients in this lending sector, including:

  • First Direct
  • Halifax
  • Nationwide
  • NatWest
  • Santander

One of the issues here is that banks typically have rigid applicant criteria, don't offer the most competitive rates, and aren't bridging finance experts.

While some may offer short-term bridge loans as a supplementary product to existing banking clients, they aren't as tailored as the diverse range of bridging finance options available through a whole-of-market broker.

The Difference Between Residential and Commercial Bridging Finance Lenders

Bridging loans are available for a broad range of purposes, and you could be applying as a standalone residential buyer, a buy to let investor, or as a commercial business.

The right lender will depend on your circumstances, as the assessment process is somewhat different between those different buying categories.

However, the difference between residential and commercial bridging finance isn't solely related to the nature of the applicant - it's about the purpose of the loan, and the type of property in question.

Residential Bridging Loan Lenders

Basically, a residential bridging loan is one that is secured against a residential property, whilst a commercial bridging loan is one that is secured against commercial property.

Most lenders are ready to arrange bridging loans against residential properties, but borrowing for commercial or mixed-use assets, such as flats with shops below, are more difficult to come by.

The proportion of a property utilised for residential living determines whether it is appropriate for FCA regulated residential bridge loan products, or unregulated - a commercial bridge loan.

For example, if the property is used as a dwelling for 40% of the time or more, it is normally classed and accepted as a regulated residential property.

This factor will determine the right lender to apply to, as some will offer a range of bridge loans, whereas others will be limited solely to residential or commercial bridging finance products.

Commercial Bridging Finance Lenders

Choosing amongst the many types of bridging loans accessible necessitates taking into account your needs and preferences, as well as your budget.

Residential bridging loans are often issued at lower rates of interest and with reduced overall borrowing expenses, though there are exceptions.

The fact that the money can be utilised for nearly any lawful purpose is one of the most enticing characteristics of bridging finance in general.

There are no restrictions on how the funds can be utilised, regardless of whether you apply for a business or residential bridging loan.

The amount you can borrow is governed by the value of the property you're using to secure the loan and your overall financial situation.

How Can I Apply to Bridging Finance Lenders UK?

The first step is always to consult an experienced, independent broker. Many banks don't accept direct applications, and may immediately refuse an applicant if you do not meet their application criteria.

Expert Help with Finding Bridging Finance Lenders

While a bridging loan can be fast, it is essential to apply to the right UK bridging finance lender who can offer to lend against the terms you need.

Short-term bridge lending will always come with higher interest rates than a standard mortgage, so it's essential to ensure your application is handled by an independent broker who can signpost your borrowing requirements to the most suitable lender.

The rates and arrangement fees chargeable also vary substantially between bridge loan providers, so it's crucial to have a broker identify the most competitive products and negotiate terms on your behalf.

To get started with your application, or to compare lending rates currently available on the market, contact the Revolution team on 0330 304 3040, or drop us a message to [email protected].

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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