Find a bridging loan

Now let’s say you run a small boutique hotel that’s been thriving, and you discover a larger hotel property in an excellent location that needs a bit of renovation before it’s guest-ready. You know you can fill those rooms once the renovations are finished, but you need fast capital to purchase the property and begin work. A bridging loan lets you move forward immediately—securing the building and covering refurbishment costs. Once you’ve upgraded the property and begun receiving new revenue (or you finalize longer-term financing like a commercial mortgage), you repay the bridging loan and move on to running your expanded hospitality business

Once you’ve found a property you’d like to purchase, the bridging loan process may look a little like this:

• Search: Compare bridging loan providers or work with a bridging finance broker (like Funding Options by Tide) to find the best solution. Some borrowers also seek cheap bridging loans or non-status bridging loans, but availability depends on your financial circumstances.

• Apply: Submit documentation about the property, your business plan, and a clear exit strategy (how you’ll repay the loan). Lenders often look closely at your background and property details to assess risk.

• Approval: Once satisfied, the lender may conduct a hard credit search. Approval can happen quickly, which is why they’re called fast bridging loans.

• Purchase: Once approved, the funds will be released to you and you, in turn, pay the seller.

• Repayment: You may repay monthly interest or have it “rolled up” and paid at the end. Often, the loan is settled once you secure other financing (e.g., a commercial mortgage) or sell your property.

  Some borrowers also “re-bridge” if they aren’t ready for a mortgage by the end of the first loan term. Funding Options by Tide can help explore this possibility or secure a new form of finance.

Though these loans offer quick access to funds for property purchases, they can also come with higher costs when you compare a bridging loan to a traditional mortgage, making timely repayments critical. These costs can include:

• Bridging loans cost between 0.7-1.5% a month

• Additional admin, legal, and exit fees

• Potential risks to your property if repayment is not met

Eligible borrowers funding property investments can be eligible for loans of up to £20M. In most cases, you can borrow up to a loan-to-value (LTV) ratio of 75% of the value of the property.

Eligibility for bridging loans often depends on the strength of your “exit plan” – aka, your strategy for repaying the loan and interest at the end of the lending term.

A solid exit plan must show lenders you have a clear path for moving on to a more permanent source of financing, such as via a commercial mortgage or funds coming in from an unfinalised sale of property.

Examples of businesses that commonly leverage bridging loans include:

• Property developers: Bridging loans simplify purchasing land, financing construction projects, or renovating properties before resale, helping property developers seize lucrative opportunities swiftly.

• Real estate investors: Real estate investors can use bridging loans to secure properties at auctions or take advantage of time-sensitive deals, allowing them to expand their portfolios and maximise returns.

• Small businesses & startups: Startups or small businesses often require immediate capital for various purposes like equipment acquisition or purchasing new commercial premises. 

• Entrepreneurs: Bridging loans can assist entrepreneurs in bridging financial gaps during expansion phases or securing new business storefronts. 

Though bridging loans offer quick access to funds for growing businesses, they also come with their own risks, including the risk of foreclosure or execution over a secured property, making timely repayments critical. They come with higher costs and increased interest rates too. Consider carefully how a bridging loan will impact any future mortgage applications. 

It’s important to be very careful when leveraging any form of short-term funding, as in this case, you’ll be expected to repay quite a large sum of money in a shorter period of time than, say, a mortgage. Contact us for support if you ever face difficulties making your repayments.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk

Start with carefully considering your personal circumstances. Is a bridging loan really the right solution for you and your business? Would you be better served taking out a commercial mortgage or buy-to-let mortgage?

Once you’re absolutely positive you’d like to go ahead with short-term funding, compare each lender to decide which you prefer. Don’t just look at the interest rates offered, although those are important. Consider also the terms they’re offering, the length of time, and look closely at what would happen if you fail to meet your stated repayment schedule. Make sure you understand whether or not they’re asking for a personal guarantee and what the impact could be to your credit score.

If you find an option you’re completely satisfied with, either apply via the lender or use a broker like Funding Options by Tide.

You may still be able to get a bridging loan with bad credit, particularly as bridging loans are secured loans and the collateral makes them a little less risky in the eyes of lenders. However, you may be provided with fewer options and you might be charged higher interest rates. Consider trying to improve your credit score by maintaining regular repayments, clearing any old debts, and keeping plenty of distance between your credit limit and your credit usage.

An exit strategy is an essential part of applying for a bridging loan and it is often what lenders will assess you on. An exit strategy outlines how you plan to repay the loan within the allotted time period.

To put one together, start with how you plan to repay the loan – for example, you could be planning to take out a mortgage on the property once it’s in your hands, or perhaps you intend to sell it off once renovations are complete.

Next, set milestones and a timeframe. How long will all of that take you? What will you do if things go wrong, for example, if a builder falls sick for a few weeks, will you still be able to repay your loan?

Then, outline how much you need to borrow, how much you intend to make, and how much you can put up yourself. You’ll also want to include your deposit amount.

Finally, gather together any supporting evidence and include it in your exit plan. This might include contracts with construction companies, negotiations with future buyers, or property valuations.

You may be able to re-bridge at the end of the term and Funding Options by Tide could support with securing either the re-bridge or a commercial mortgage.

From application to the funds being released, they usually take anything from a few days to a few months.

Only you can answer that question, but do remember due to their short term nature, bridging loans carry increased risk. Consider all your bases and spend some time thinking about what you’d do if something goes wrong.

Usually, you’ll need a deposit of approximately 25% of the property you’re planning to acquire. It is possible, in some circumstances, to forgo this deposit, but it’s not recommended as you’ll likely be subjected to higher interest rates and less favourable terms. If you do decide to enter into an agreement like this, consider speaking to a financial consultant to ensure you understand all the risks.

If using a property you already own, a lender will only release up to 75% of the equity you hold. With and without a mortgage, this could look like: Property Value: £1m Existing mortgage: £250,000 Equity: £750,000 Maximum Loan (75% LTV): £562,500

Property Value: £500,0000 Mortgage: £0 Maximum Loan (75%): £375,000

Improve your credit score, build out a strong exit strategy, and have a lower LTV requirement.  

A bridging loan may appear on your credit file and could impact how lenders view your affordability for future mortgages. However, as long as you manage repayments on time and the bridging finance is cleared before applying for a new mortgage, any negative impact is generally minimal.

A bridging loan is a short-term finance solution—often up to 12 months—designed for immediate capital needs (e.g., bridging a property purchase, urgent renovations). A mortgage is typically a long-term loan with lower interest rates. Bridging loans can be more expensive, but they offer faster access to funds and flexible repayment schedules.

This depends on the loan-to-value (LTV) ratio, typically up to 75% of the property’s value. Some bridging finance lenders may extend higher or lower LTVs based on your credit profile, exit strategy, and the type of property (residential vs. commercial). Some providers advertise 100 bridging loans or 100 LTV bridging loan options, but these tend to be rare and come with stricter requirements.

A fast bridging loan can sometimes be arranged within days, though more complex deals may take several weeks. Having your documents (property details, exit strategy, proof of security) ready can speed up the process.

Failure to repay can lead to late payment fees, higher interest, or in worst-case scenarios, repossession of the secured property. If you anticipate delays—say your property sale is taking longer than expected—speak to your lender or broker early. You may be able to “re-bridge” or refinance to avoid default.

A bridging finance broker can help you navigate multiple lenders, secure competitive rates, and handle paperwork. This is particularly valuable if you have specialised needs—like commercial bridging finance—or limited time to source multiple quotes.

Regulated bridging loans generally apply to residential properties and are overseen by the Financial Conduct Authority (FCA). Unregulated bridging loans focus on investment or commercial properties and have fewer consumer protections. Always check whether your bridging loan is regulated, especially if you plan to live in the property.