Bridging Finance | HNW Bridging Finance Brokers

Platinum Global Bridging Finance is an HNW Bridging Finance Broker offering Real Estate Debt Finance for the UK and European property markets. With over 15 successive years in the financial markets, we have seen and worked through the last financial crash and the re-emergence of old and new finance products so we are sure we can provide our clients with the most up-to-date financing knowledge.

We specialise in providing small, medium and large bridging finance, development finance and commercial finance deals for the UK and Europe. Our flexible approach is down to our network of banks, non-bank lenders, high-net-worth investors, investment funds and private bridging partners based in the UK and worldwide.

Our specialism doesn’t stop with bridging finance and international commercial property finance as we work with many Debt Funding, Capital Raising and JV Companies based in the UK, Europe and the rest of the world. We help companies raise capital for a variety of sales, expansion and merger uses. We also work with specialist providers of Structured Property Finance, Senior Loans, Mezzanine Finance and Growth Capital. We have financed over £1.5 billion of lending in our established lending locations via our network of over 200 lenders.

We pride ourselves on looking at each application precisely the asset, equity and exit strategy on a case-by-case basis. Our extensive financial network has the ability to help companies leverage property debt financing from $1 million – $500 million using our financing options:

Development Finance

Bridging Loan Finance

Bridging Loans

Property Bridging Finance

Commercial Finance

Commercial Mortgage Finance

Stock Loan Finance

Europe Global Commercial Finance

Types Of Bridging Finance

  • Bridging Loans – Short Term
  • Bridging Loans – Regulated
  • Bridge to Let Finance
  • Bridging Loans – Refurbishment
  • Light Development Bridging Loans
  • Senior Development Bridging Loans
  • Stretched Senior Loans
  • Development Exit Loan
  • Mezzanine Finance
  • Construction Finance
  • Senior Loans
  • Mezzanine Loans

Types Of Bridging Finance

  • Development Finance Spain
  • Commercial Bridging
  • Commercial Term Finance
  • Commercial Auction Finance
  • Commercial Bridging Exit Finance
  • Commercial Finance Germany
  • Commercial Finance France
  • Commercial Finance Netherlands
  • Acquisition Financing
  • Direct Lending
  • Growth Capital

 Bridging Finance: Which Countries

  • United Kingdom
  • Northern Ireland
  • Southern Ireland
  • Scotland
  • Wales
  • Spain
  • Netherlands
  • France
  • Germany
  • Scandinavia
  • Denmark
  • Sweden
  • Norway

 Bridging Finance: Which Countries

  • Australia
  • New Zealand
  • United States
  • Canada
  • Austria
  • Italy
  • Portugal
  • Belgium
  • Switzerland
  • Malaysia
  • Hong Kong
  • Singapore
Bridging Finance

Bridging Finance For UK Property

What Is Bridging Finance?

Bridging finance, also known as bridge loans or bridging loans, is a short-term financing option that provides immediate funds to individuals or businesses to bridge the gap between the purchase of a new property and the sale of an existing one.

It is a form of temporary finance that helps borrowers meet their immediate financial needs until a long-term financing solution is secured.

Bridging finance offers a short-term financing solution for individuals and businesses seeking immediate funds to bridge the gap between property purchases.

It provides flexibility, speed, and accessibility, but borrowers should carefully consider the costs, risks, and their ability to repay the loan within the agreed time-frame.

How Does UK bridging Finance Work?

Bridging finance allows clients to borrow money more quickly that standard loans and are paid to you as a lump sum for a property purchase or refinance.

Once your bridging finance has been arranged, your interest charges are usually ‘rolled up’ into the loan, leaving you with no monthly interest payments to make. This is normally referred to as retained bridging loan interest.

At the end of the loan term, the bridging finance is repaid in full, along with any interest and outstanding charges and the legal charge is removed from your property.

Repayment of property bridging finance is usually funded through the sale of your property or by taking out a remortgage to repay the short term bridge. Your plan for repaying the loan is known as your exit strategy.

Loan to value (LTV) and equity are key to securing this type of finance, with lenders focusing on these two points to assess new loans.

Most lenders are happy to offer a maximum of 70% to 75% of the property value on unregulated bridge\ing loans, although some will extend this to 80% for  bridging loans supported by extra assets as security.

Is UK Bridging Finance A Replacement For A Property Mortgage?

Yes, bridging finance is a short term replacement for a standard property mortgage.

They a short-term form of alternative form of funding that is used when a mortgage wouldn’t be available, but you need to borrow money against a property.

This can be because the property isn’t mortgage-able , you need the funds to purchase a new property quickly or you have a short-term financial gap that needs to be filled, for example using a bridging loan for a house purchase before your existing one sells.

Is Property Investment The Main Reason For Bridging Finance?

Yes, property investment is one the main reasons for taking out a bridging loan but its not always the case.

Bridging Finance is required for many different reasons whether you’re financing an investment property, buy to let property or your own home.

This is because property bridging finance allows you to secure a property quickly and add value through property refurbishment where it is needed.

What Can UK Bridging Finance Be Used For?

Bridging finance can be used for the following reasons:

  • To fund a property purchase or refinance quickly.
  • Buying property at auction.
  • To finance an uninhabitable property.
  • To purchase an unmortgageable property.
  • Buying a property before selling your existing property.
  • To settle a divorce settlement.
  • To fund a business venture or tax bill.
  • To pay an unexpected probate bill.
  • To buy a below market value property without putting down a deposit.
  • To fund a property refurbishment.
  • To buy a property or land while undertaking an application for planning permission.
  • To repay your existing mortgage while selling your property.

Bridging Finance – Advantages and Disadvantages

Bridging Finance – Advantages

Bridging loans, also known as bridge financing or bridging finance, are short-term loans designed to bridge the gap between the immediate need for funds and the availability of a more permanent financial solution. These loans offer several advantages, including:

  1. Speed and Quick Access to Funds: Bridging finance is known for their fast processing times. They can be arranged relatively quickly compared to traditional loans, which makes them an attractive option for individuals or businesses in need of immediate funding.
  2. Flexibility: Bridging finance is highly flexible, allowing borrowers to use the funds for various purposes. They can be used for property purchases, renovation projects, buying new assets, or even for resolving temporary cash flow issues.
  3. Temporary Financing Solution: Bridging finance provides a short-term financing solution, typically ranging from a few weeks to a few months. They are particularly useful in situations where a property transaction needs to be completed quickly or when a temporary injection of capital is required.
  4. No Repayment Penalties: Some bridging finance comes with the option of no early repayment penalties. This means borrowers can pay off the loan earlier than the agreed-upon term without incurring any additional fees. This flexibility allows borrowers to minimize interest costs.
  5. Credit History: Bridging finance is often available to borrowers with less-than-perfect credit histories. While creditworthiness is still a factor, bridging loan lenders may be more willing to consider other factors such as the value of the property being used as security.
  6. Property Chain Break: Bridging finance can be beneficial in property transactions where a chain is involved. If a buyer is waiting for the sale of their current property to finance the purchase of a new one, a bridging loan can provide the necessary funds to bridge the gap and prevent delays or complications in the property chain.
  7. Potential for High Loan-to-Value (LTV) Ratios: Bridging finance may offer higher loan-to-value ratios compared to traditional loans. This means borrowers can secure a larger loan amount based on the value of their property or other assets used as collateral.

It’s important to note that bridging finance is generally have higher interest rates compared to traditional loans, and they should be considered as a short-term solution rather than a long-term financing option. Additionally, borrowers should carefully evaluate the terms and conditions, as well as the costs associated with the loan, before proceeding.

Bridging Finance – Disadvantages

While bridging finance offers various advantages, they also come with some disadvantages that borrowers should consider before opting for this type of financing. Here are some potential disadvantages of bridging loans:

  1. Higher Interest Rates: Bridging finance is typically carry higher interest rates compared to traditional loans. Since they are short-term loans and involve higher risks for lenders, the interest rates can be significantly higher. This can increase the overall cost of borrowing.
  2. Short-Term Solution: Bridging finance is intended to be short-term solutions, usually ranging from a few weeks to a few months. If the borrower is unable to secure long-term financing or repay the loan within the agreed-upon term, they may face additional costs, penalties, or the risk of default.
  3. Additional Fees and Costs: Apart from higher interest rates, bridging loans often come with various fees and costs. These can include arrangement fees, exit fees, valuation fees, legal fees, and administration fees. It’s crucial to consider these additional costs when evaluating the affordability of the loan.
  4. Increased Risk: Bridging finance is considered higher-risk loans due to their short-term nature and the circumstances in which they are often used. If the borrower is unable to secure long-term financing or sell the property/assets used as collateral, there is a risk of default and potential loss of the property/assets.
  5. Property Valuation Risk: In the case of property-backed bridging finance, the value of the property used as collateral is a critical factor. If the property is overvalued or its value declines during the loan term, it can impact the borrower’s ability to secure long-term financing or repay the loan.
  6. Limited Availability: Bridging finance may not be as readily available as traditional loans from banks or other lenders. They are often offered by specialized lenders or private finance providers, and their availability may be limited depending on the location and specific circumstances.
  7. Impact on Credit Score: Taking out property bridging finance may have an impact on the borrower’s credit score, especially if they are unable to meet the repayment obligations. Defaulting on the loan or late payments can negatively affect creditworthiness and make it more challenging to secure future financing.

Before pursuing property bridging finance, borrowers should carefully assess their financial situation, consider alternative financing options, and seek professional advice to understand the potential risks and costs involved.

Heres A Brief Explanation of Different Types Of Bridging Finance


  • Short-Term Bridging….. Is short term financing or short-term property loan that enables you to sell your existing home, improve the property or find a new tenant while providing liquidity to bridge the period until you obtain permanent mortgage financing.


  • Regulated Bridging…… Is financing secured by a charge over a residential property which is lived in by you, a family member or other close person. The purpose of the loan is not wholly or predominantly for the purposes of a business carried on, or intended to be carried on by the property owner.


  • Bridge To Let Lending…… Is designed for the buy to let investment market to allow property investors to buy a property they may otherwise struggle to finance with a traditional mortgage. They have the added benefit of an exit strategy in-built by way of a pre-approved refinance onto a traditional buy to let investment mortgage.


  • Refurbishment Bridging…… Is short term property finance available to property investors, landlords and developers looking to upgrade a tired or run down residential or mixed use property before renting it out. Refurbishments are much smaller projects than property developments.


  • Bridging Light Development……This is where no planning permission or building regulations are required and where there is no real change to the overall use and nature of the premises. Light development refurbishments would include new bathroom, new kitchen, redecoration, rewiring, new windows etc. There are also finance options for more complex properties including HMOs and multi-unit freehold blocks of flats as well as finance for applications made through limited companies or from first-time investors.


  • Bridging Senior Development Finance……Involves bridging development finance with mainstream development lenders so maybe you can take on bigger projects. This would involve major structural work on a commercial development that could be already built and you would complete some major work to get the project completed. This would involve planning permissions or dealing with building regulations to get through to completion such as a block of apartments.


  • Development Finance Stretched Senior Loan……Is a specialist development finance loan to give property developers access to a higher development loan than would be available from normal lending sources. Property developers and house builders find this higher leverage lending helpful as it means they do not need to provide such a large percentage of funding themselves. This not only helps with cash flow, for many it allows the opportunity to build more than one development project at a time.


  • Developer Exit Finance…….If your property development project is completed and you are reaching the end or nearing the end of a development loan period the financing is likely on a higher rate. Development exit finance can help replace your existing funding with affordable short-term finance and help lower costs until the properties are sold on.


  • Mezzanine Finance…….Mezzanine financing is a hybrid between debt and equity. In a multi-tiered financing of an operation, for instances, the sources of money will be senior debt, senior subordinated debt, subordinated debt, mezzanine debt, and finally the owner’s own equity. In other words, the mezzanine lender is very close to being last to get paid if something goes wrong.


  • Construction Finance…….Construction Finance is a specialist funding and support solution designed for contractors and subcontractors who provide construction services under a contract, framework agreement or Purchase Order. It provides funding by advancing cash against the value of invoices raised on the completion, or part-completion for staged contracts, of work carried out.


  • Commercial Bridging……Is a commercial loan for borrowers who wish to use the funds for commercial purposes. This may include the purchase of an investment property or securing new offices for a growing company. Its classed as commercial if the property or land it is being used to purchase is  more than 40% commercial or 40% of the floor area in floor space.


  • Commercial Mortgage Term Financing……Is a commercial mortgage or any loan or finance secured on property which is not your main residential residence. Commercial properties would be office buildings, shopping center’s, industrial warehouses, or apartment complex’s to name just a few.


Commercial Property Auction Finance…… Is financing that you can arrange the funding in advance of the auction that can settle in 14 days. Before the hammer falls on the commercial property  you know how much your budget is, and even what specification of property the lender will fund.


  • Company Acquisition Finance…..helps companies complete acquisitions with the goal of growing and responding more quickly to expansion options. Through acquisitions companies also access adjacent markets as well via financing from equity and JV companies helping expansion and take-over propositions.


  • Company Direct lending… are provided mainly by “non-bank” lenders, such as institutional investors to help with growth, acquisitions, shareholder buyouts and other desired financing options needed by expanding companies from the financing arena.


  • Company Growth Capital…..promotes expansion and growth can happen in a variety of ways and the type of capital needed by companies can vary greatly. Investors and non bank lenders are options ready for when finance is required to move the company forward.


  • Senior Term Debt Loans…..or senior term debts are used to raise capital for specific, and often temporary objectives such as acquisitions, buyouts, refinancing, recapitalization’s or fixed asset purchases which will require a huge lump sums. Our lenders offer this lending for Western Europe, the UK and the Nordic regions.


  • Mezzanine Finance…..are a capital resource that sits between (less risky) senior debt and (higher risk) equity that has both debt and equity features. Companies use mezzanine financing to achieve goals that require capital beyond what senior lenders will lend. Our lenders offer this lending for the UK, Europe, United States and Australia.


  • Aircraft Finance and Leasing Finance…..Our aircraft financing options allow our clients to look at purchasing aircraft anywhere in the world unlike some other companies that only offer country specific finance. Our finance covering options include business jet, helicopter, propeller and commercial spare engine.


  • Subprime bridging exists usually, because clients find themselves unable to qualify for mainstream or bridging and would like to purchase a property. This can be due to any number of reasons such as having complicated income streams. Poor credit history, or no previous credit rating or non-standard personal circumstances or borrowing requirements. Non standard bridging really should be your last place for finance having exhausted family, friends, mortgage lenders and second charge lenders because the interest rates and fees are high and not repaying the money borrowed when the Bridge comes to an end can have very severe consequences. Private bridging lenders charge Interest rates range from circa 0.5 to 1.5% per month — yes per month — with lenders charging fee between 1–3% of the amount you borrow. A typical Bridge term from private lenders would be 6 or 12 months with interest rolled up i.e. added to the loan. How you repay all this money when the Bridge comes to an end is key to understanding how Bridging lenders think. A lender is not really interested in your income or your job or for that matter your credit history as they are lending you money based on how they will get it back as this will be classed as sub prime lending. What I mean is the ‘exit’ strategy — a word you will hear right at the very beginning of a conversation with a lender. This exit strategy is the deciding factor to understanding if you are likely to be offered finance — how will the lender get their money back? They do not make any money until you repay the loan plus all the rolled up interest so the exit has to feasible, realistic and achievable.
Bridging Lending

What Our Clients Say

“Since working with Platinum Global Bridging Finance, they have met and surpassed my expectations of working with bridging advisers. They take the time to really know their clients which gives me every confidence my financial goals are well understood but also my comfort level. They provide updates and have always been available to answer any questions or to explain my case process. We use PGBF for all our development financing needs in the UK and Europe.” (Commercial)

“After years of working with a number of brokers we are glad we found PGBF.  We spoke with Ged and he explained the benefits of developer exit finance and how it could help us cut our development loan costs and give us more time to sell our apartments. His advice was excellent and all explained in plain English. I would definitely recommend speaking with Platinum Global if you are considering any sort of development financing.” (UK Property Developer and Seller)

“I wanted to take a moment to drop you a line to once again let you know how very much I appreciate your services, your professionalism and the candor and advice you have provided me during the course of our partnership working with you in property. From the very beginning, your transparency, the guidance you shared, and the mentoring that you proffered instilled extreme confidence in me to take advantage of your superior services.” (European Mezzanine Finance)


£1.5 Million Bridge on St Paul's Apartment

Short Term Bridging Finance

Knightsbridge Bridging Refurbishment £2.8m

Knightsbridge Bridging Finance

Developer Finance Westminster £38m

Develoment Exit Finance

Application Process

1. Initial Fact Find

We will require some basic detail surrounding your lending query in order to provide you with the proper advice and approach the best lender

2. Lending Terms

Once we have obtained a ‘decision in principle’ from one (or more) of our chosen lenders, we will present the indicative lending proposal to you in a concise and transparent manner.

3. Client Agreement

You will formally engage with us and become our client. We will then immediately begin the application process.

4. Application

This step will involve due diligence and support documentation gathering. We will ensure you are well aware of each and every document you will need in order to satisfy the lenders criteria. We will also assist you with any certification or translation required.


5. Valuation

During the application step, we will also begin gathering quotes for a formal valuation. At least three options will be presented to you and we will work with you to ensure your preferred valuer is chosen where possible.

6. Offer

The lender will release a formal offer document – which is a promise to lend. This document will obtain all the details of the loan and will also give you one last opportunity to apply any minor adjustments to the facility before drawdown.

7. Legals

At this stage your solicitor will engage with the lenders’ solicitor to begin working on their pre-completion checklist.

8. Completion

Once all the pre-completion conditions have been met, the funds will be sent to your solicitor to complete the purchase or refinance.
Takes 2-6 Weeks



A bridging loan is essentially a short-term loan that is often arranged within a short time frame and may be made to an individual or a company and secured against residential or commercial property. The defining characteristic is that it is a loan that bridges the gap to an exit, which is usually a refinance or a sale of the asset. Our expert short-term loan brokers have helped hundreds of customers secure loans for their property, so do give us a call if we can help you.

How Long Does Bridging Finance Take To Arrange?

Bridging can be arranged within a matter of hours with funds released within 72 hours although usually this takes a bit longer and can take a couple of weeks. While a bridging transaction may be arranged much quicker than could be achieved through a traditional bank, most bridging companies still apply sensible and relatively conservative lending criteria. Usually, such lenders are smaller nimble operations and specialise in doing all of the usual checks that a bank will do but without the encumbrance of bank bureaucracy.

The term of the loan can be as short as one day usually up to a maximum of 12 months. Loan amounts generally start at around £25,000 with no maximum loan amount.

Who Uses bridging Finance?

Many individuals and businesses including professional landlords, property investors and developers all use short-term loans as part of their overall property funding strategy and can be arranged on a second-charge basis.

Why Use A Bridging Loan?

The main reasons that property professionals use bridging are listed below:

•To raise finance quickly
•To refurbish a property
•To finish a development
•To buy at an auction
•To purchase property that would not secure a mortgage in its existing condition with a mainstream lender
•To bridge a shortfall of funding between buying and selling the property when a sale is delayed
•To raise a deposit for purchasing property

Is Bridging Finance Expensive?

Short-term finance is always more expensive than longer-term lending; however, with more and more lenders entering the market it is competitively priced. The interest rate charged will depend very much on the proposition in question; however, current rates range from 0.7-1.5% per month, potentially with even higher rates on more difficult propositions.

However, with many different lenders in the market, there is a wide variety of charging structures so, in addition to the interest rate borrowers may pay a variety of other fees to the lender.

Bridging Finance Arrangement Fees

A fee is usually charged by the lender for providing the facility and is typically two per cent. In most instances, it can be rolled up into the loan.

Bridging Finance Exit Fees

This is a fee which may be charged by the lender when the loan is repaid. If charged, it is typically one month’s interest and is charged irrespective of whether the loan has run to its full term or not.

Bridging Surveyor’s Fees

A fee will usually be payable to the firm hired to survey the property.

Bridging Finance Legal fees

As with a standard mortgage, short-term financing must be processed with all the usual legal requirements. However, in many cases lenders have in-house lawyers and their costs may be included in the lender’s arrangement fees.

Bridging Finance Lending Criteria

Bridging financiers will look at the credit profile of the borrower, the strength of the asset, and the exit strategy and require that the borrower has a sufficient upfront cash contribution.

What Are The Risks Of Bridging Finance?

It is essential to establish a clear exit strategy to ensure the loan can be repaid (either via sale or remortgage) to avoid paying high penalty interest rates and possibly losing the property to repossession if the loan cannot be repaid. Borrowers should remember, just like a mortgage, the property may be at risk if the loan repayments are not kept up to date.

Choosing A Bridging Lender

An increasing number of short-term lenders are entering the market, and choosing one can be a minefield, particularly as some types of bridging lending require a regulated lender. For landlords and property investors, however, the type of bridging required is usually of the non-regulated variety so it is not essential to use an FCA-registered bridging lender. Many reputable bridging lenders are members of the Association of Short-Term Lenders. This self-regulating body operates a strict code of conduct to ensure that borrowers are treated fairly.

Bridging lending is such a specialist area, it is always advisable to seek the services of a specialist broker or independent financial adviser. They will take time to understand the property, its location, the borrower’s circumstances and funding requirements and be best placed to match these components with the most suitable lender.

What is Property Development Bridging Finance?

Property development finance is funding for either major new building projects or comprehensive renovations. We can source finance for residential, commercial and mixed-use developments.

How does development finance work?
Development finance is designed to help with the purchase and build costs of a development or refurbishment project. Depending on the loan and project size, lenders will release funds in stages rather than all in one go. Doing this helps developers and lenders keep track of spending and the physical progress of the project.

For large-scale projects, the drawdown of the development funds is subject to independent monitoring surveyor (IMS) sign-off. Lenders use these surveyors to check works are both on time and within budget.

For smaller-scale projects such as refurbishment, you may be able to draw down all the funds at once, depending on the lender. An experienced development finance broker like Platinum Global Bridging Finance will be able to advise how lenders will likely approach your project.

How much development bridging finance can you borrow?
The loan amount is based on a percentage of the gross development value (GDV) at the end of the work, currently up to a maximum of  70% loan to GDV, with a maximum of 85% of the total costs. Typically we work with developers looking for funding from as little as £250k through to projects needing finance above £25m. There really isn’t an upper limit, but a refurbishment loan is likely to be more suitable if you want to borrow a smaller amount.

Loans are typically structured to ensure that the developer’s contribution is utilised up front, with the lender providing the majority, if not all, of the build costs. It is usual for funds to be drawn down in stages against the architect’s or quantity surveyor’s certificates.

For example:
A developer has planning permission to build three houses with a gross development value estimated at £4.5 million. The total costs involved are £3.1 million, made up of £1.25 million for purchasing the land and £1.85 million in build costs. A lender might agree to development finance of £2.325m (limited to 75% of costs) structured as £475,000 initial advance followed by the balance in stages throughout the build.

Projected gross property development values will influence loan-to-project costs, but funding is available on occasions of up to 85% of the purchase price and build costs.

It is often possible to organise a loan to finance up to 100% of the property development costs where the borrower already owns the land on an unencumbered basis.

Where the property developer can improve the planning consent post-acquisition, we can often negotiate increased levels of funding that recognise higher land and gross development values.

The amount you can borrow is based on the strength of your proposal. The quickest way to find out how much you will be able to borrow is to speak to one of our expert development finance brokers.

How long can you borrow for?
A property development loan is usually arranged on an interest-only basis, and the term of the loan would typically be 6 to 24 months, depending on the size and nature of the underlying project.

We negotiate finance requirements with a full panel of property development lenders and other financial institutions to provide the right ‘match’ to the project.

When should you apply for development briging finance?
Development funding without full planning consent is challenging to secure unless you are highly experienced and have completed several development projects. Before seeking finance, it is essential to finalise planning consents and have all relevant documentation available to show your lender.

What rates can you expect to pay for development bridging finance?
There are no set rates for property development finance. That’s where we come in. We have access to the whole market and work with a panel of specialist property development lenders and other institutions to find the right match and negotiate the best rate for each proposition.

The lenders assess each application individually and price it according to the strength of the development proposition and the borrower. We have years of experience in this field. We know what information should be included within an application and how best to present it for submission.

That’s not to say we can’t give you an idea of what you might expect to pay. At the moment, a good benchmark starts from around 7%. Usually, the interest can be rolled up into the loan, so there are no monthly payments.

Your development bridging finance application: where to start
Once you’ve identified the project and roughly worked out viability, costs, end value and profit margin, please get in touch. It doesn’t matter if you don’t already own the land/property.

We’ll ask lots of questions! We need to get as much information about your proposed project as possible to allow us to assess it and give an honest opinion as to whether we’ll be able to secure finance for you.

If we can help, we’ll provide you with an outline (known as indicative terms) of the rates and terms you can expect lenders to offer you, including a breakdown of anticipated costs and fees.

The proposal/application
If the indicative terms are acceptable to you, we will compile the proposal and submit your application to the most suitable lender. You should be prepared to provide a full development appraisal to include the following:

  • CV and evidence of previous development projects/experience
  • Details of the planning consent including any restrictions, Section 106 or Community Infrastructure Levy requirements
  • Drawings/plans
  • A full breakdown of the development costs
  • Likely end value of the project (known as the Gross Development Value)
  • Schedule of works and build stages
  • Timetable for release of funds which ties in with the end of each stage of the build
  • Asset and liability statement
  • Financial accounts
  • Full details of the professional team involved
  • Proof of identity
  • Exit strategy (e.g. sale or refinance)

Site visit
Lenders are always keen to meet the developer to understand the project from a professional and personal standpoint, so we will arrange a site visit between you and the lending manager. Usually, we will accompany you to help answer any questions and support your application.

Formal loan offer
After the site visit, the lending manager will submit a report on the project, which helps with the underwriting process. Your application is then submitted to the underwriters. At this stage, there is often a bit of back and forth to ensure that the lender has all the information needed to make a decision. If the underwriting is favourable, your application will go before the lender’s credit committee for approval. Once the committee has approved the application, the lender will issue a formal loan facility offer, subject to the findings of a valuation report. The offer will confirm the precise terms of the loan, including rates, costs and fees.

The lender will require a valuation report that comments on the development’s specific aspects. We will arrange for this to be carried out by a surveyor recommended by the lender. The surveyor will comment on:

  • The value of the site in its existing condition
  • Predicted build costs
  • Anticipated gross development value
  • Exit strategy – sale or rental potential on completion of the project

Legal process
If you accept the terms of the formal offer letter, you will need to sign and return it to the lender. At this point, you should instruct solicitors to carry out the legal work. In development finance applications, it is usual for the lender to have separate legal representation. Make sure you choose a solicitor who has relevant experience. Also, bear in mind that some lenders require the borrower’s solicitor to have at least two or three partners in the practice.

The loan application is complete when the finance has been fully arranged. At this stage, the funds can start to be released in pre-agreed stages, subject to sign-off by a quantity surveyor or architect. With most loan facilities, interest is only payable on the money drawn down.

When the development is complete, if the loan facility has an exit fee, this will need to be paid to the lender by the agreed date.

What is a Commercial Bridging Loan?

A commercial bridging mortgage is a loan granted to a business to purchase commercial property. There are several key differences between commercial and residential mortgages, with the most notable being:

  • The maximum loan-to-value may be lower than a residential mortgage
  • Variable mortgage interest rates are typically used for commercial mortgages. However, fixed-rate mortgages are available upon request
  • Commercial interest rates tend to be higher than residential rates but can be negotiated on an individual case basis

When considering a commercial bridging mortgage, it’s essential to consider the following:

  • Your experience in the business sector (if an owner-occupier mortgage)
  • If let to a third party, your landlord and/or property investment experience
  • Your available deposit
  • The costs of purchase
  • Lenders calculate debt serviceability on either the adjusted Net Profits of the target trading business or other businesses that you operate
  • If this is an investment purchase, the amount of rent received from the investment property to service the mortgage and the strength of the covenant and lease term remaining

Types of Commercial Bridging Mortgage

There are two main types of commercial bridging mortgages, each suited to different investment goals and each impacting the kind of rates and finance that lenders will offer.

An owner-occupier mortgage: This model is for businesses seeking property for their own trading purposes.

A commercial investment mortgage: This allows businesses to invest in commercial properties to let out to other businesses.

In both cases, it is important to remember that you are unlikely to receive a loan for 100% of the cost of the property. Typically, lenders require deposits of 25-40% for these mortgages. Having a reputable and experienced broker assist you will help you find a deal that works best for your business.

Commercial Bridge Mortgage Rates and Fees

This type of financing usually carries a variable interest rate. This means that you will receive a rate over the Bank of England base rate or the lender minimum base rate, similar to a residential tracker mortgage. Your investment risk profile will determine the amount over the base rate — for example, loan to value, debt service cover and experience in the sector.

In addition, you can expect your mortgage to include a range of fees, such as lender arrangement fees, valuation fees, legal fees, and broker fees.

Eligibility Requirements for Commercial Bridge Mortgages

Commercial mortgage eligibility is based on your background and experience and assesses your ability to meet the monthly repayments for the loan. Potential lenders will want to see solid assurance that you can repay their lending. This can mean providing a detailed business plan that addresses how the business will afford the repayments. Lenders will conduct background checks whilst underwriting the application. This includes assessing net worth, reviewing the source of the deposit, an overview of your personal and/or business bank statements for proof of good account conduct, and assessing two to three years’ historical financial accounts for either the existing or target business purchase.

The lender will instruct an independent valuation of the freehold and/or a business appraisal. The valuers will comment on the value of the trading business, splitting out the business (goodwill) and freehold values. Alternatively, if you are letting the investment out to a third party, the market rent, quality of the tenant/lease term remaining and price per square foot with comparable evidence of previous sales included.

Remember, a bad credit rating does not mean you cannot get a commercial mortgage, but it may be more challenging as a result. Similarly, if the business has not been trading for long (under three years), lenders will be cautious about investing, and this can affect the amount you can borrow or the terms of the loan.

How Do Commercial Bridging Mortgages Work?

Commercial mortgages for owner-occupiers offer better interest rates than unsecured commercial loans. Often, the repayments for a commercial loan are cheaper than rent payments, allowing businesses to plan and have tenure security. Traditionally, these loans last from 10 to 25 years, usually repayment mortgage, with variable interest rates linked to the Bank of England Base rate and cover around 60% to 75% of the freehold property value. Some lenders can lend against a percentage of the ‘going concern value’, but please be aware additional security may be required by the lenders.

If you invest in commercial property to rent out, the interest rates may be higher, but some are available on an interest-only basis (making repayments lower). The property’s actual rental income or potential rental income will need to service the mortgage, but the lending will be no higher than 65 to 75% of the investment value.

What is the Role of an HNW Bridging Finance Broker in International Bridging Finance?

The role of an HNW bridging finance broker in international bridging finance is crucial. These experts leverage their extensive network and knowledge to connect high-net-worth individuals with suitable lenders who specialize in providing short-term loans for international real estate transactions. Their expertise ensures smooth and efficient financial transactions, bridging the gap between buyers and lenders in the international market.

Benefits of Commercial Bridging Mortgages

Taking out a commercial mortgage offers some key advantages for growing businesses, including:

  • Capital growth as property value increases and often cheaper monthly payments over rented stock
  • The location of the business is secure if you own the freehold of the property.
  • Rent rises will not be applicable
  • Tax-deductible commercial mortgage interest
  • Additional revenue if you rent out the property

Platinum Global Bridging Finance is a distinguished high-net-worth finance broker. We specialize in providing tailored financial solutions, including Property Bridging Finance, Development Finance, Single Stock Loans, Margin Stock Loan and Commercial Property Finance tailored to meet the diverse needs of our clientele seeking robust financial lending solutions.

HNW Bridging Finance Broker December 1, 2020