Bridging Loan Lending Criteria
If you are urgently seeking bridging finance it’s worth having knowledge of what the lender is likely to require from you to push things ahead.
How the lender will review your request
Bridging loans are subject to several checks from whichever lender takes on the case; therefore it is advised to gain some understanding in regards to the kind of checks that you may expect to pass. The more you know about this criteria, the quicker and simpler your loan application will be to approve.
In the UK, there are over a thousand different loan providers some being public bodies or private entities. How they handle your loan request will vary from one to the other, but there are certain things you can be aware of needing to fulfil.
If you perhaps need any personal assistance with your application, contact us and we will be happy to help you get things in order.
What lenders look for
Be sure to consider the below for your application:
Minimum loan of £100,000 is required, up to maximum depending on value and strength of the project. Up to 70% LTV usually up to OMV with a possible up to 80% on residential security.
The standard loan terms are between 3 to 12 months. On unregulated loan applications loan term can be extended up to 24 months, however on regulated loans term are limited by FCA rules to a maximum of 12 months.
First charge on the property will be required, second charge will be considered as will equitable charge. Security types acceptable are commercial, mixed-use, residential or land.
Purpose will generally fall under; purchase, refinance, purchase of property at auction, light/heavy refurbishment, exit loan following development, planning/preplanning scenario.
Loan will be available to individuals 18+, UK Limited companies, LLP, SPVs and Overseas companies/individuals.
No strict requirement for good credit with adverse credit acceptable on strong security, i.e. CCJs, arrears and other credit issues. For some lenders a credit report will not be needed.
There is generally no need for income proof to be shown as interest can be rolled up over the whole loan term.
Exit usually based on sale of the property or refinancing, with other types of exit possible on a case by case basis.
Arrangement fee starting from 1%, with additional valuation & legal fees. An exit fee will be chargeable depending on lender.