What can I use as security?

The property, land or commercial building you are securing the bridging loan against will serve as collateral for the loan. This means the lender may have the right to repossess the property if you do not repay the bridging loan.

Who can take out a bridging loan?

Bridging loans are accessible to a wide range of borrowers, including property developers, landlords, homeowners and Limited Companies

Do bridging loans affect credit score?

Looking at options for bridging loans does not affect a credit score, as this part is via a ‘soft search’. A full application will show on a credit report but as with all loans, it's the failure to meet the terms of the loan, such as repayments that can affect your credit score very negatively.

Can bridging loans be repaid early?

Yes, but… watch out for Early Repayment Charges (ERC’s). These are costs built into your contract with the lender that have to be paid if you clear the bridging loan early. Not all bridging loans have ERC’s.

Are bridging loans regulated?

If your bridging loan is secured against your current home or a home you are purchasing, it will be regulated by the Financial Conduct Authority (FCA). A bridging loan falls under FCA regulation if you or a family member intend to live in the property, providing additional consumer protection. However, if the loan is being used for business purposes, investment purposes or no family members will reside in the property, it will be classified as unregulated.

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Decide approximately how much you need to borrow and complete the ‘Get Quote’ form. A friendly, experienced, advisor from Fluent will then call you.

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Understanding bridging loans

A bridging loan is secured short-term borrowing, usually taken out for usually no more than 12 to 24 months, depending on what type of borrower you are.

Its main purpose is to ‘bridge’ a financial gap between a sale, and the purchase of property, where funds are needed quickly. However, as long as there is a property or properties to secure the loan against and a credible exit strategy (repayment), there are many other circumstances and uses of a bridging loan.

Interest accrues monthly (often referred to as ‘rolled’ or ‘retained’) and the entire loan amount is repaid when the funds become available from sale of property or refinance or another type of exit strategy.

Bridging loans can be used for personal, investment or commercial reasons. You might hear them called by other names such as Bridge Loan, Bridging Mortgage or Bridging Finance. Alternatively they may well be referred to in connection with what they are being used for, such as Auction Finance.

What are bridging loans used For?

Here are some of the reasons that a bridging loan could be used for depending on what type of borrower you are:

Business reasons for a bridging loan:

Commercial Property Purchase – Buying offices, retail spaces, or warehouses when time-sensitive.

Refurbishment or Development – Renovating commercial or residential properties before securing long-term finance.

Expanding Business Premises – Acquiring additional workspace or land for growth.

Buying Property at Auction – Meeting fast auction deadlines.

Bridging Cash Flow Gaps – Covering operational expenses while waiting for income (e.g., outstanding invoices).

Stock or Equipment Purchase – Buying essential goods or machinery when capital is temporarily tied up.

VAT or Tax Bill Payments – Preventing financial penalties from unpaid HMRC taxes.

Short-Term Business Investment – Funding business growth before securing traditional finance.

Business Acquisition or Buyout – Providing quick capital for acquiring another company.

Land Purchase for Development – Securing land quickly before securing long-term development finance.

Personal reasons for a bridging loan:

Buying a Property Before Selling Another – If you’re purchasing a new home but your current property hasn’t sold yet, a bridging loan covers the gap.

Property Investment – eg Buy to Let, Auction, Non mortgageable, where the property can be updated and mortgaged, or flipped to sell to repay the bridge.

Property Chain Break – If a buyer pulls out of a house sale, a bridging loan can keep your purchase on track.

Auction Property Purchase – When buying property at auction, where completion is typically required within 28 days.

Renovation or Refurbishment – Funding for property improvements that don’t qualify for standard mortgages.

Uninhabitable Property Purchase – Buying a property that mortgage lenders won’t finance due to its condition.

Inheritance Tax or Probate Costs – Covering estate-related expenses while waiting for assets to be released.

Preventing Repossession – Paying off mortgage arrears to avoid foreclosure while seeking long-term finance.

Lease Extensions – Financing a leasehold property extension to maintain value before refinancing.

Temporary Cash Flow Needs – Short-term liquidity for major expenses, such as education fees or divorce settlements.

Debt Consolidation – Paying off high-interest debts quickly before switching to more affordable finance.

What are exit strategies for bridging loans?

An exit strategy for bridging finance is the planned method of repaying the loan within the agreed term. Lenders require a clear, realistic, and provable exit strategy before approving the loan to ensure repayment. Common exit routes include property sale, remortgage, business income, or asset liquidation, and inheritance. Lenders assess the feasibility of the strategy based on factors such as market conditions, property value, financial stability, and borrower history. A strong exit plan reduces lender risk and improves approval chances.

Key considerations of bridging loans

Costs: Bridging loans are not designed to be long term solutions. They provide a solution for providing funds until an alternative plan takes over. This means bridging costs tend to be higher than mortgages. You should be looking at the interest rate and if it’s fixed or variable, upfront fees and costs to take out the loan, and early repayment charges (ERC’s).

Product limitations: An exit strategy must be in place to repay the bridging loan. The loan to value (LTV) ratio for bridging loans is usually lower than standard mortgages. The borrower will need some of the funds in place to cover the full bridging needs. In addition, the higher the LTV, the higher the interest rate.

FCA Regulation, or lack of it. Not all bridging loans are regulated by the FCA. When you move more into the business or investment arena of bridging loans the less likely it is the product will be regulated so careful due diligence or help from experts is even more important.

FAQ’s

What can I use as security?

The property, land or commercial building you are securing the bridging loan against will serve as collateral for the loan. This means the lender may have the right to repossess the property if you do not repay the bridging loan.
Who can take out a bridging loan?

Bridging loans are accessible to a wide range of borrowers, including property developers, landlords, homeowners and Limited Companies
Do bridging loans affect credit score?

Looking at options for bridging loans does not affect a credit score, as this part is via a ‘soft search’. A full application will show on a credit report but as with all loans, it’s the failure to meet the terms of the loan, such as repayments that can affect your credit score very negatively.
Can bridging loans be repaid early?

Yes, but… watch out for Early Repayment Charges (ERC’s). These are costs built into your contract with the lender that have to be paid if you clear the bridging loan early. Not all bridging loans have ERC’s.
Are bridging loans regulated?

If your bridging loan is secured against your current home or a home you are purchasing, it will be regulated by the Financial Conduct Authority (FCA). A bridging loan falls under FCA regulation if you or a family member intend to live in the property, providing additional consumer protection. However, if the loan is being used for business purposes, investment purposes or no family members will reside in the property, it will be classified as unregulated.

The service that Simply Business Loans introduces you to is wholly provided by Fluent Money, who are responsible for data you provide during that introduction. Use of the service means you agree to their terms, conditions and privacy policy, which can be found at https://www.fluentmoney.co.uk/data-protection/

Fluent Money® is trading style of Fluent Bridging Ltd, registered in England and Wales. Company Registration No. 13198365. Registered Office: 102 Rivington House, Chorley New Road, Horwich, Bolton BL6 5UE. Fluent Bridging Ltd is an appointed representative of Fluent Money Ltd, who are authorised and regulated by the Financial Conduct Authority. Firm reference number 654425. See www.fca.org.uk. Fluent Money Ltd is a credit broker, not a lender. ICO Z9868049

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