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When a property transaction needs to move before longer-term funds are available, bridging finance can provide a short-term route forward.
Jayhawk Capital advises on bridging finance for purchases, auctions, refinancing, refurbishment projects and other time-sensitive property requirements.
Before recommending a route, we consider the property, the amount required, the available security, the deadline and how the finance will be repaid. This gives you an early, honest view of what may be possible and whether bridging finance is appropriate for the transaction.
For property developers, investors, landlords, professionals, business owners and private clients.
Bridging finance is designed for situations where funding is required for a defined period and there is a clear plan for repaying it.
It may be considered when a standard mortgage is not available quickly enough, the property is not yet suitable for longer-term lending or funds are tied up elsewhere.
The ability to move quickly can be valuable, but speed alone does not make bridging finance suitable. The full cost, the available security and the intended repayment strategy all need to be considered before proceeding.
Auction purchases normally come with a fixed completion deadline.
Bridging finance may provide the short-term funding required to complete the purchase while a longer-term mortgage, property sale or another repayment route is arranged.
A bridging loan may help someone proceed with a purchase before the sale of an existing property has completed.
This can be relevant where a chain has broken or where waiting for a sale would mean losing a particular property.
Some properties may not initially meet the requirements of a standard mortgage lender because of their condition or the work needed.
Bridging finance may be used to purchase and improve the property before it is sold or refinanced onto a suitable longer-term product.
A developer may need to complete a purchase before planning, development finance or the final project structure is fully in place.
A bridging loan can sometimes provide temporary funding for the acquisition, with the intention of moving onto development finance once the relevant conditions have been met.
Bridging finance may be considered where an existing mortgage or short-term facility is approaching its repayment date and more time is needed to complete a sale, refinance or project.
This should not simply delay an unresolved problem. The revised structure still needs a credible and achievable repayment plan.
In some circumstances, equity in an existing property can be used to raise funds for another purchase, investment or property project.
This could include a home or investment property, but the risks, costs and regulatory position need to be assessed carefully before any recommendation is made.
The intended method of repaying a bridging loan is often referred to as the exit strategy.
Because bridging finance is short term, this cannot be treated as something to work out later. A lender will want to understand how the facility is expected to be repaid and whether that route appears credible within the proposed term.
We consider the proposed exit alongside the property, the borrowing requirement and the transaction timeframe.
Where the repayment route depends on a sale, refinance or project milestone, the assumptions behind it need to be realistic.
A repayment strategy could involve:
A bridging application is not assessed on speed alone. The structure needs to make sense from the outset.
We begin with what the funding will be used for and why bridging finance is being considered instead of a standard mortgage or another form of property finance.
The type, condition, location and value of the property will influence which lenders and facilities may be relevant.
Where more than one property is available as security, the wider structure may also need to be considered.
We look at the amount needed, the purchase price or current property value, existing borrowing and the costs attached to the transaction.
The maximum borrowing available will depend on the lender, security, repayment strategy and individual circumstances.
The application may be made by an individual, partnership or company.
Income, assets, experience, credit history and the way the property is or will be owned can all affect how the requirement should be presented.
The repayment plan must be considered alongside the amount borrowed and the proposed term.
Where the exit involves refinancing, the likely requirements of the intended longer-term lender should also be considered at the beginning.
We establish the target completion date and identify what needs to happen before funds can be released.
Valuation, legal work, supporting documents and third-party responses can all affect the eventual completion date.
The interest, lender fees, legal work, valuation and brokerage costs must be considered together.
A lower headline rate will not necessarily produce the most appropriate or cost-effective facility once the entire structure is taken into account.
Moving quickly does not mean rushing the assessment or overlooking important details. It means asking the right questions early, identifying the information that will be needed and reducing preventable delays.
Time can be critical in a bridging transaction, particularly when a purchase, refinancing requirement or property project needs to complete by a fixed date.
Moving quickly does not mean rushing the assessment or overlooking important details. It means asking the right questions early, identifying the information that will be needed and reducing preventable delays.
Jayhawk Capital was built around speed and accuracy of service. We aim to establish whether a proposed transaction appears workable at an early stage, while being frank about anything that may affect the structure or timeframe.
That approach is particularly important in bridging finance. A poorly prepared application can lose valuable time, while a fast answer that overlooks the repayment strategy or full costs may not serve the client’s wider plans.
A bridging loan is rarely the final objective. It is normally one stage within a wider purchase, refinancing plan or property project.
The aim is to structure the immediate borrowing around the client’s circumstances and intended outcome, rather than treating the bridging loan as an isolated product.
Experience across residential mortgages, buy-to-let, development, commercial and high-value property finance allows Jayhawk Capital to consider what needs to happen after the bridge, as well as what is required to complete the immediate transaction.
This can be especially important where:
Bridging finance will generally cost more than a standard mortgage because it is designed as short-term, flexible funding.
Depending on the facility, costs may include:
Interest may be paid monthly, deducted from the advance or added to the facility, depending on the lender and structure.
We will explain the anticipated costs, the amount you are expected to receive and how the fees affect the overall transaction before you decide whether to proceed.
Jayhawk Capital may charge a tailored broker fee of up to 1% of the loan, subject to a minimum fee of £500. For bridging finance, the fee is generally payable on completion.
Bridging finance is short-term borrowing secured against property.
It is normally used where funds are required before a property is sold, longer-term finance is available or another defined repayment event occurs.
Bridging finance can often progress more quickly than a conventional mortgage, but there is no single guaranteed completion time.
The timeframe will depend on the lender, the complexity of the transaction, valuation, legal work, supporting information and how quickly everyone involved can respond.
We will establish the intended deadline at the beginning and explain what needs to happen for it to remain realistic.
Yes. A lender will need to understand how the bridging loan is expected to be repaid.
The exit may involve a property sale, refinancing, development finance or another clearly identifiable source of funds. The route must appear realistic within the proposed term.
Potentially. In some circumstances, a home or another existing property may be offered as security to raise finance.
This carries significant risk, and the regulatory position will depend on the circumstances. The suitability, costs and repayment strategy must be considered carefully before proceeding.
It may be possible to use bridging finance to purchase or refinance a property that is not currently suitable for a standard mortgage.
The extent and nature of the work will determine whether bridging or development finance is the more appropriate route.
Some bridging loans are regulated and others are not.
The position depends on factors including the borrower, the purpose of the loan and how the secured property is or will be occupied. We will explain the regulatory position that applies to the proposed transaction before you proceed.
The amount available will depend on the property value, existing borrowing, security offered, proposed exit, borrower circumstances and lender criteria.
We will need to understand the transaction before giving an indication of the borrowing that may be available.
It is helpful to know:
You do not need to have every supporting document ready for the first conversation.
Great customer experience! John was brilliant start to finish and really supported us throughout the whole process. Bridging loans were all new to us so John really took the time to make sure the loan was right for us, along with explaining everything in detail. We had a short timescale and John again made sure this was pushed along at each point in the process
Adviser: John Symons
You may already know that bridging finance is the likely route, or you may simply have a property purchase, project or deadline and want to understand what may be possible.
Tell us about the property, the amount required, the intended use of the funds and how you expect the borrowing to be repaid.
We will review the initial details and contact you to discuss whether there appears to be a realistic route forward and what information is needed next.
Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured against it.
Not all forms of bridging finance are regulated by the Financial Conduct Authority.
Bridging finance often sits alongside other property or mortgage requirements. Explore related services offered by Jayhawk Capital.
