What is Bridging Finance?
Bridging Finance, also known as Bridging Loans, are interim financing options used by investors, landlords and residential buyers. They are useful in a variety of ways as they offer a flexible option to ‘bridge the finance gap’ when there isn’t immediate access to funding.
There are two common types of loans associated with Bridging Finance, these are known as Regulated and Unregulated. Determining what type of loan is required depends on the type of property and its use. More information about these two types of loans can be found on their dedicated pages.
Who Regulates the Loans?
The Financial Conduct Authority (FCA) regulates the financial services sector, including lenders that offer bridging loans. They are there to ensure financial markets remain honest, competitive, and fair. If UK markets work well, competitively and fairly they benefit customers, staff and shareholders, and maintain confidence in the UK as a global financial hub.
Unregulated bridging lenders will still adhere to proper and professional behaviour, they follow and maintain the correct standards from organisations such as the National Association of Commercial Finance Brokers (NACFB), the Financial Intermediary & Broker Association (FIBA) and The Association of Short Term Lenders (ASTL).