Bridging Loans for Property

A bridging loan is fast, short-term finance secured against property. It bridges the gap between two transactions: buying before you have sold, completing inside an auction deadline, funding a refurbishment, or moving quickly on a commercial purchase while longer-term finance is arranged. Sadi's Commercial Finance places bridging cases with lenders who can genuinely move at pace.

We are an NACFB and FIBA member firm with a panel of more than 300 lenders, specialising in unregulated commercial and investment property finance.

When a bridging loan makes sense

  • Auction purchases. Winning at auction usually means completing within 28 days, far faster than a standard mortgage.
  • Broken chains. Completing on a purchase before the sale of another property has gone through.
  • Refurbishment. Funding work on a property that is not currently mortgageable, then refinancing once it is.
  • Buying below market value. Moving quickly on a deal where speed is the reason the price is good.
  • Planning gain. Holding a site while permission is secured, then refinancing or selling.
  • Business opportunity. Releasing equity from property to fund something time-sensitive.

How bridging finance works

The loan and the security

A lender advances short-term funds secured against property, usually as a first charge. Second charge bridging is possible where there is enough equity and the existing lender consents. Additional security can sometimes be used to increase the amount raised.

The exit

The exit is how you repay, and it is the single most important part of a bridging application. It is normally a sale or a refinance onto a longer-term facility. Lenders want to see it evidenced at the outset, not assumed. A weak or vague exit is the most common reason a bridging case is declined or priced badly.

Term

Bridging is designed to be temporary. Terms typically run from 1 to 18 months, and cases are priced on the expectation that you will exit early rather than run the full term.

How interest is paid

  • Retained. The interest for the term is held back from the advance, so you pay nothing monthly. Most common.
  • Rolled up. Interest accrues and is settled in full on repayment.
  • Serviced. You pay the interest monthly, which keeps the balance down but needs proven income.

What bridging finance costs

Bridging is priced monthly rather than annually, which makes it look cheap at a glance and expensive over a year. It is the right tool when it is short and the exit is clear, and the wrong tool when it is used to postpone a problem.

  • Interest. Quoted per month. Rates commonly sit somewhere between around 0.55 and 1.5 percent per month, moving with loan to value, asset type and how clean the exit is.
  • Arrangement fee. Often around 2 percent of the loan, usually added to the facility.
  • Valuation. Priced on the property.
  • Legal fees. Yours and the lender's.
  • Exit fee. Charged by some lenders, not all. Worth checking before you commit.
  • Broker fee. Disclosed to you in writing before you proceed.

These are indicative ranges to help you plan. Actual terms depend on the lender, the security and your circumstances, and are confirmed in the formal offer.

How much you can borrow

Loan to value is commonly up to around 70 to 75 percent of open market value, and can be higher where additional security is offered. On refurbishment cases lenders may also lend against the value after works, released in stages as the work is signed off. Where a purchase is genuinely below market value, some lenders will consider lending against value rather than price, though most will not.

How fast bridging actually is

Straightforward cases can complete in a week to ten days, and occasionally faster. What slows things down is almost never the lender. It is valuation availability, title problems, and solicitors who do not do this work regularly. If you are working to an auction deadline, instruct a solicitor experienced in bridging on day one.

Regulated or unregulated

Most bridging on investment and commercial property is unregulated, which gives more flexibility on structure and speed. Bridging secured against a property you or your family live in is a different, regulated product. Unregulated commercial and investment bridging is the area we specialise in.

How to get a bridging loan with Sadi's Commercial Finance

  1. Speak to a specialist. Call or enquire online with the amount you need and your deadline. A specialist reviews the deal and comes back to you the same working day.
  2. Share your exit. Tell us how you plan to repay, whether that is a sale or a refinance, and give the basic details of the security.
  3. Get matched with a lender. We approach lenders from our panel who suit the deal type and secure an Agreement in Principle.
  4. Valuation and legal work. The lender instructs a valuation while solicitors work in parallel, keeping the timeline as tight as possible.
  5. Offer and drawdown. Once valuation and legals are complete the lender releases funds, often within days on straightforward cases.

A bridging loan we arranged

We arranged a £1.8M bridging loan with retained interest for a mixed-use development site in Greater London, funded at pace to keep the scheme on schedule. Read the full case study, or browse all our case studies.

Why use a broker for bridging

Bridging lenders differ enormously in what they will accept, how fast they really move and what they charge when a case is not textbook. A lender who is cheap on a clean case can be slow and expensive on a complex one. Going direct to the wrong lender costs you the deadline.

Jaff Sadi spent more than 25 years in UK high street and commercial banking before founding the firm, on the approving side of the table. We structure the case, evidence the exit properly and place it with a lender who can actually deliver in the time you have. One specialist handles it from first call to drawdown.

Frequently asked questions

How fast can a bridging loan be arranged?

Often within a week to ten days when the documentation and the exit are clear. Bridging is built for speed, and the usual delays come from valuation and legal work rather than the lender.

What is an exit on a bridging loan?

It is how you repay, usually a property sale or a refinance onto longer-term finance. Lenders want it evidenced upfront, and a weak exit is the most common reason a case is declined.

What can be used as security?

Typically property, residential, commercial or land, and sometimes a combination. Additional security can be used to raise a larger amount.

How much does a bridging loan cost?

Interest is quoted monthly rather than annually and commonly falls between around 0.55 and 1.5 percent per month, plus an arrangement fee usually around 2 percent, valuation and legal costs. Some lenders also charge an exit fee.

Do I need to make monthly payments?

Usually not. Most bridging is arranged with interest retained from the advance or rolled up and settled on repayment, so there is nothing to pay monthly.

Can I get bridging finance with bad credit?

Often yes. Bridging lenders weigh the security and the exit far more heavily than credit history, though adverse credit will usually affect the rate and the loan to value.

Can bridging be used to buy at auction?

Yes, and it is one of the most common uses. Auction contracts typically require completion within 28 days, which a standard mortgage rarely achieves.

What happens if I cannot repay on time?

Speak to us early. Extensions are sometimes possible, but they cost money and are not guaranteed, which is why the exit is stress-tested before you borrow rather than after.

Related guides

Speak to a specialist about your deadline, or apply for funding online.