What are Bridge Lending Solutions?

In its most simple terms, bridge lending is a short-term loan that covers a shortfall of funds—most usually used for property transactions.  

A typical example of where you might take out a bridge loan is when you’ve found a new house to purchase but haven’t yet sold yours. Another popular reason for needing one is if you’re upgrading a dilapidated property. It’s virtually impossible to secure traditional lending on a house that’s not habitable—such as one that doesn’t have a bathroom or kitchen, or perhaps needs extensive re-plumbing. 

A bridge loan allows you to borrow the money to purchase the property and carry out the upgrades. Once done, you can then secure a mortgage at a much lower interest rate and pay back the outstanding funds on the bridging loan.

You might also see bridge lending solutions described as swing loans.

All About Bridge Lending Solutions

• What you need to know about bridge lending solutions
• What is a bridge loan suitable for?

What you need to know about bridge lending solutions

Bridge loans typically:

• Are approved quickly: the best lenders can make the funds available in less than 14 days. This is in direct contrast to traditional loans and mortgages that can take weeks or months to be approved.
• Are secured on collateral: this is usually in the equity you have in your main residence. However, it could be something else, such as other real estate that you own, stocks, or another agreed asset.
• Are short-term: they’re a temporary financial solution, so are usually defined in months, as opposed to years.
• Have higher interest rates than other forms of borrowing: this is because they’re short-term loans and are considered to be a higher-risk lending option.
• Often come with flexible payment options: including interest-only and deferred payments.

There are two different types of bridging loans—open or closed. The former is a loan that doesn’t have a fixed end date. Instead, this is flexible and is a good option if there’s any question about when you’ll be able to repay the funds. A closed bridge loan has a fixed date.

Whichever type you go for, it’s unlikely that any bridge loan term will be agreed for more than 24 months, with most completed within 12 months or less. You can also get a bridge loan with a fixed or variable interest rate.

What is a bridge loan suitable for?

A bridge loan is a popular way to get your hands on funds in a short space of time and has many benefits. It’s a great solution in a wide range of scenarios, such as: 

• You need to finance a fix & flip.
• You’ve found your perfect property but haven’t sold yours yet.
• You need to rebuild your credit to take out a conventional mortgage.
• You’ve hit a delay in your mortgage application—a bridge loan can ensure you don’t lose out on your chosen property.
• You’re developing or renovating a property.
• You’re looking to purchase a property  at an auction.
• For a business with short-term cash-flow issues.

You’re buying and/or upgrading a dilapidated property that you can’t yet secure traditional finance for

Want to Understand More About Bridge Lending Solutions? Contact BRRRR Loans Today

Bridge loans are a specialty at BRRRR Loans. We regularly approve them for a wide variety of needs—and we can usually make the funds available in 14 days or less. We also offer flexible repayment options and even the ability to defer payments until the end of the borrowing period.

We’re the lender of choice for many reasons, including our simplified application process, jargon-free Ts & Cs, and industry-low rates.

Discover more about our bridge lending solutions and call our expert team today.