- Project plans
- Project activities
- Legislation and standards
- Industry context
- Specialist wikis
Last edited 21 May 2021
Bridging loan for property
A bridging loan is a short-term funding solution which can be used to ‘bridge’ a gap between money being owed and credit becoming available. Typically, bridging loans are used in property transactions and can be essential in ensuring a property purchase can be achieved.
Bridging loans are short-term finance options that enable a house buyer to complete a purchase before they sell their existing home through a high-rate interest loan. This type of finance option can also help home-movers if there is a gap between the sale and completion dates in a chain, for example somebody looking for a quick-sale after renovating a property or to help assist with purchasing at an auction.
There are two types of loans: closed and open. A closed bridge loan has a fixed repayment date. An open bridge loan does not have a fixed date, but is usually required to be paid off within a year. With closed bridge loans, the borrower will usually already have exchanged to sell a property and fixed the completion date.
The typical recipients of bridging finance are landlords, small-scale property developers, and individual’s purchasing at an auction where finance is required quickly. Other recipients can include wealthy borrowers who require simple lending on residential properties.
- Properties to purchase: A new property, buy-to-let purchases, auction purchases.
- Properties to build and renovate: Housing developments, self-builds, barn conversions, refurbishment projects to sell for profit.
- Properties where funds are to be raised: Un-mortgageable properties, purchasing before selling, short-term cash flow solutions.
 Related articles on Designing Buildings Wiki.
- Construction loan.
- Cost plans.
- Credit check.
- Estate agent fees.
- Equity and loan capital.
- Funding options for building developments.
- Funding prospectus for new developments.
- How much does it cost to sell my home.
- Mezzanine finance.
- Private Finance Initiative.
- Project-based funding.
- Property development finance.
- Trade credit insurance.
Featured articles and news
To support in Social Housing Decarbonisation Fund bids
A must read for all built environment professionals.
A brief description of time in the sun.
Given by ICE President Ed McCann.
Two new research reports published by APM.
50% off APM Associate membership for Designing Buildings users.
A commentary from the insurance perspective.
In brief with further links.
A definitive book on a pioneer of green architecture.
Using heritage as a catalyst for reviving historic centres.
Declaration prioritising sustainable urbanisation adopted.
Some brief words about the actuator.
After 34 years at the Institute.
To support the next generation of engineers.
CIAT reporting from the Competition and Markets Authority.
Making sustainable construction number one priority.
Interview with ECA CEO.
Many provisions came into force on June 28, 2022.
With room to expand.
Refurbishment, Energy Efficiency, Indoor air and process.
Aluminium Composite Panels (ACP) is one example.
Write about something you know, help us build and grow !