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Bridging loans are designed as a short-term financing option - but knowing exactly how long you can borrow for depends on the lender and the project!
Here we'll explore bridge loan terms, and what you might expect as a minimum and maximum length.
For help finding a bridging loan for any project of any duration, contact business finance broker on 0330 304 3040, or drop us a message to info@revolutionbrokers.co.uk.
Most bridge loans are due for repayment in a year, or just a few months.
If you need to borrow for longer, there are options up to around two years as standard. More specialist bridge loans up to three years can be negotiated with the help of an experienced broker.
There isn't a specific short term bridge loan, as this type of financing is always short-term in nature, so anything under a year is typical.
Some lenders have a minimum loan term, often of one month, but bridge loans can last for just a couple of weeks if you need a fast financing option and are waiting for a mortgage, for example, to be completed.
Lenders will usually offer up to 18 months, with some agreeing to two years provided the project is viable, and the exit strategy will cover the interest for this period.
Longer bridge loans of up to 36 months are available, but this is a niche product and not available from many lenders.
Many people choose a bridging loan because it takes very little time to organise - as short as a few days pending any valuations.
Bridge finance is much faster than a mortgage since the lender needs to assess the exit strategy rather than your income, affordability and outgoings in as much detail.
Most bridge loans take around five days to two weeks to finalise and get the funds into your account.
If you find that something goes wrong and you cannot pay the bridge loan back at the end of the term, there are a few options:
There are a few different ways a lender might charge interest:
If you're looking for a longer-term bridge loan, and cannot be sure when your exit strategy will come into play, you need an open bridging loan. That means you have greater flexibility, although there will still be a finite end of term date.
Closed bridging finance is lower cost, but there is a specific settlement date, and you must be certain you can repay by that point.
Each lender is different, and rates vary considerably across the market, but you will achieve the lowest offers if:
If you're looking for particularly long or short term bridging finance, the support of an experienced, independent broker is vital.
Contact Revolution Brokers today on 0330 304 3040 or email us at info@revolutionbrokers.co.uk to get your application started!
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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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