Unregulated Bridging Finance
Unregulated Bridging Finance
Over the past decade, Bridging Finance has become a mainstream option for investors and businesses to enable them to achieve their goals through short term solutions. They are now very popular and are considered a viable option with a variety of lenders ranging from banks all the way through to private investors.
Unregulated Bridging Loans are favoured by intermediaries, property investors and property developers, often to ‘bridge’ a payment gap who have found themselves falling short of funds. If you are looking to purchase or refinance a secondary property, commercial asset, land or a buy-to-let investment, and you require fast short-term funding then you would need an Unregulated Bridging Loan.
Having previously helped build a Specialist bridging Lender; heading up their sales and credit teams (providing facilities from £50,000 to £20,000,000); we have an intrinsic understanding of how lenders work in this space and how they will collaborate with you from application, through to repayment of the facility.
Bridging Finance areas we can help with, include:
- Auction/Quick purchase (mainstream lenders can be slow, you may have seen an opportunity that you can’t miss)
- Developer Exit Finance/Low-rate bridging (sometimes bridging rates can beat development finance rates.)
- Land Finance
- Planning Bridge (to allow time for planning approval)
- 2nd Charge Bridge (releasing equity from/for investment)
- Bridge Refinance (bridge to bridge for extended projects)
- Bridge-to-Let (when properties are deemed unmortgage able by lenders)
- Discounted Purchases. (If you are obtaining a property for a good price; evidenced by valuation, or are awaiting planning with a perceived immediate uplift of value)
Useful Information
Take a look at our Useful Information section for some extra guidance and insights about what you are requesting.
Loan Information
Bridging Finance is a flexible finance solution which can be hugely beneficial to some clients who can find obtaining funding difficult elsewhere. This could be due to the nature of their company and its structure (for example offshore/overseas borrowers). Also, clients with adverse credit will be considered for these types of loans, in particular when a bridge is being used to enable either re-finance or sale.
Lenders typically offer three key payment structures to help make these loans more affordable.
- Retained Interest:
Interest is calculated against the gross loan at the end of the loan term with all the interest retained from day one. Giving clients an opportunity to repay once alternative funds or better LTV’s have been achieved. - Serviced:
Interest payments are paid monthly against the gross loan amount. - Part Serviced and Part Retained:
Interest is calculated against the gross loan at the end of the loan term with an agreed interest amount being retained, together with an agreed interest payment being made monthly.
Lending Options
Residential (unregulated) Bridging
Typical Terms: up to 80% loan to value (typically 75%)
Payment Structure: 1-36months, serviced, retained or part serviced interest options.
Fees: Rates from (subject to frequent changes) 0.6%/calendar month, 1-2% lender fee
Favoured Assets: Houses, Flats, HMO’s, High Value Property
Security: 1st Charge, 2nd Charge and Equitable Charge. PG’s/Debentures (for company applications) typically required.
Survey: Required, however if LTV is 70% or less this can be done digitally reducing our clients’ costs.
Commercial Bridging
Typical Terms: up to 70% loan to value
Payment Structure: 1-36months, serviced, retained or part serviced interest options.
Fees: Rates from (subject to frequent changes) 0.6%/calendar month, 1-2% lender fee
Favoured Assets: All types of commercial property considered including unusual/undesirable property
Security: 1st Charge only. PG’s/Debentures (for company applications) typically required.
Survey: Not always required
Land Bridging
Typical Terms: up to 60% loan to value with planning, up to 50% LTV without planning
Payment Structure: 1-18months, typically retained interest only
Fees: Rates from (subject to frequent changes) 0.6%/calendar month, 1-2% lender fee
Favoured Assets: All types of land considered, including agricultural and brownfield sites
Security: 1st Charge only. PG’s/Debentures (for company applications) typically required.
Survey: Not always required