Bridging loan finance is popular for developers who need fast funding, with flexible terms. The Revolution team often receives inquiries about the maximum loan value, which depends on multiple factors!
In this guide, we'll summarise the core criteria for securing a larger bridging loan. To get an application started, contact the team on 0330 304 3040, or drop us a message to firstname.lastname@example.org.
What are Typical Bridge Loan Values?
Different lenders will all have policies about what they consider a large loan - there isn't any fixed cap on bridging finance, which can run into many millions.
The key is around the exit strategy - if you have a viable way to pay back the original loan, you can borrow up to any amount required.
Your exit plan needs to cover the loan's full value, plus the interest accrued, and typical options are to remortgage the property once development work is complete, or sell it on and use some of the proceeds to repay the bridge loan.
Is It Hard to Get a Large Bridging Loan?
As we've seen, the risk depends on the exit strategy's stability, so if this is solid, then it isn't any harder to get a substantial size loan.
Lenders will risk assess every application, and if there is a low risk, the process is straightforward.
It might be harder to get a small bridging loan than a larger one! Most lenders have a minimum, starting at as low as £10,000 but more commonly up to around £50,000.
Does a Large Bridge Loan Need a Bigger Deposit?
Again, it's all about risk! Generally, bridge loans require a deposit of around 30% or 35% - but if the risk factor is higher, you might need a deposit of up to 50%.
Should there be any risks, such as investing in a non-standard development property, you're likely to need a deposit at the higher end of the spectrum.
Who Offers the Lowest Rates on Large Bridge Loans?
The best way to find competitive rates on bridging finance is to consult a whole-of-market broker.
New products and lenders come onto the market all the time, and it's essential to understand the lender's criteria before deciding who to apply to.
If you meet the below criteria, you are in a strong position to negotiate low-interest rates:
- Viable exit strategy. This is a critical part of the assessment, and some lenders will have policies about what exit plans they can accept. You will need evidence of the stability of your exit strategy, such as a remortgage agreement in principle, or a projected valuation of your development.
- Good credit history. If you have bad credit, then a lender will perceive your application as higher risk and offer steeper interest rates.
- Development experience. For complex projects, lenders may require a minimum number of years knowledge to feel confident that you will complete the development successfully.
- Security. Bridge loans are often secured against the property you are developing - but you can use other properties or assets as security. If that security is of a high value, comfortably covers the loan's worth, and would be easy to sell in a repossession scenario, the risk factor is lower.
- Healthy deposit. As with any secured loan, the higher the deposit, the lower the LTV and the lower the risk factor. If you have a deposit of 40% or more, you will get the lowest rates on the market.
How Do Bridge Loan Lenders Calculate the Interest?
There are three different options:
- Monthly interest, payable each month.
- Rolled up interest, with no monthly repayments and the interest added to the total debt repayable at the end of the term.
- Deferred interest, where you borrow the lender's interest and agree on the full balance payable in advance.
Are There Large Bridge Loans for Buy to Let Investments?
There are indeed - bridging loans are commonly used in property investments for the rental market.
One of the best options can be to organise a bridge to let, whereby you have an agreement with the same lender to remortgage once the development work is complete.
Most buy to let bridge loans are available at a maximum of 75% Loan to Value, and the usual criteria apply for both the bridging finance and the buy to let mortgage.
Can I Get a Large Bridge Loan for a Limited Company?
Yes, bridge loans are available to businesses at similar rates as for individual applicants.
Some lenders will require a personal guarantee from the directors, and lenders are usually happiest to lend to Special Purpose Vehicle limited companies.
Are There Regional Restrictions on Large Bridging Loans?
Not really - a whole-of-market broker can find you a deal pretty much anywhere in the UK! Some lenders will have minimum bridge loans available, so if you’re looking to borrow for a smaller value, it is vital to check which lenders offer smaller bridge loans.
There are fewer bridging lenders in Scotland and Northern Ireland, but it's always possible to find a regional provider through an experienced broker.
Expert Advice with Large UK Bridge Loans
If you need a substantial bridging loan and need to find the most competitive rates available, contact Revolution on 0330 304 3040 or email us at email@example.com.
Our teams have years of experience negotiating high value, short-term bridge finance and offer a fully independent, whole-of-market service.