What is a bridging loan? Understanding short-term property finance

What does bridging loan mean?

A bridging loan is a type of short-term finance designed to “bridge” the gap between buying a property and securing longer-term funding. It provides fast access to funds, typically secured against a property.

Example: If you buy a property at auction, the payment deadline is often just 28 days. A bridging loan can provide the cash quickly, giving you time to arrange a mortgage or sell another asset.

How does a bridging loan work?

Bridging loans usually run for 6 to 24 months and are always secured against property. They are repaid once you’ve either sold the property or arranged a long-term mortgage. Because they are short-term and flexible, interest rates are generally higher than a standard mortgage. However, the speed of access and flexible repayment make them attractive when timing is critical.

The different types of bridging loan

There are two main types of bridging loan, each suited to different situations:

Closed bridging loan

A closed bridging loan has a fixed repayment date that both lender and borrower agree upfront, often bound by a sale contract. Because the repayment is predictable, this type of loan usually comes with lower interest rates.

Open bridging loan

An open bridging loan does not have a fixed repayment date. This offers flexibility, but it is considered higher risk by lenders, which often results in higher interest rates compared to closed loans.

How much can I borrow with a bridging loan?

The amount you can borrow depends on several factors:

• Property value and type – residential, semi-commercial, commercial, or land (with or without planning permission).
• Loan-to-value (LTV) ratio – lenders typically advance a percentage of the property’s value.
• Exit strategy – how you plan to repay, such as via property sale or refinancing.

In cases of leasehold property, lenders generally require at least 65 years remaining on the lease at the end of the loan term to accept it as adequate security.

At Christie Finance, we work with a wide panel of lenders to help clients access the right bridging finance for their needs, whether it’s for residential, commercial, or development opportunities

How to get a bridging finance and decide if it’s right for your business

It’s important to understand how bridging finance works and whether its suitable for your business and its needs. The loans are typically offered by specialist lenders and require collateral, usually property or business assets. Before committing, there’s a few things you should ask yourself: Is the cost worth the speed? Bridging loans, be it open or closed, tend to be quite expensive due to the inflated interest rates and fees. But, if there is a high constraint with time, where your business would need expedited access to cash flow/capital - a bridging loan could be the best option. We specialise in exactly that, spearheading quick turnarounds, with access to the whole of market as well as family office & private lenders, we have supported several clients with extremely tight timelines & have tailored the funding solution according to each situation.

How to get a bridging loan quickly: what to expect and how long it takes

If you’re under pressure to access capital fast, here’s a few things you should prepare to be able get a bridging loan efficiently:

Prepare your exit strategy: Here at Christie Finance, we want to see a clear plan for how you’ll repay this loan, this beneficial for us and the lenders. This could be through a plethora of things, selling a property, refinancing or using expected income - we would be assisting you with each step of the way

Get your documents in order: Speed is everything with bridging finance. Having key documents ready, such as proof of ID, property details, business accounts (if applicable), and any existing finance arrangements can significantly reduce delays. We’ll help you understand exactly what’s needed and when.

Be clear on your timeline: Lenders want to know how quickly you need the funds and why. Whether it’s to secure a property purchase, cover a short-term cash flow gap, or fund renovations, being upfront about your timeline helps us match you with the right lender who can move at the pace you need.

Work with a specialist broker: Bridging loans are complex and time sensitive. Working with a broker like Christie Finance means you benefit from our market knowledge, lender relationships, and experience in structuring deals quickly and effectively.

How the Christie Finance Real Estate Team Secured Funding in Just 7 Days

We recently supported a client in securing a bridging loan for a large industrial site in Derbyshire. The business was working to a tight deadline, and speed was critical. Thanks to our strong lender relationships and deep market knowledge at Christie Finance Real Estate, we were able to complete the deal in just seven days from the initial application. The bridging loan was secured with a second charge against the commercial asset, and because of the significant equity in the property, the lender was happy to proceed without a formal valuation. This case highlights how bridging finance can be a powerful tool for businesses needing fast, flexible funding. 

Read the full case study to learn more about how we made it happen

At Christie Finance, we’re here to make bridging finance simple to understand. Our team helps clients through every stage of the process, from explaining how it works, to exploring how much you might be able to borrow, and guiding you through the application. Whether you’re purchasing a property, funding renovations, or looking for short-term cash flow support, we can help you secure the right funding solution quickly and with confidence.

Speak to Our Real Estate Finance Expert:

Ram Kakar  
Head of Real Estate
Email: Ram.Kakar@christiefinance.com
Mobile: +44 7764 241 349

FAQs about Bridging Loans

Do bridging loans still exist?

Yes, bridging loans are still widely available in the UK. They are mainly used for short-term funding needs such as property purchases, renovations, or auction buys.

Do bridging loans require a down payment?

Most bridging loans require you to contribute equity, often through the property you already own. The amount depends on the lender’s loan-to-value (LTV) criteria, typically up to 70–75% of the property’s value.

Does a bridging loan affect mortgage applications?

Not directly, but lenders will want to see how you plan to repay the bridging loan. A clear exit strategy such as refinancing onto a mortgage is essential.

Are bridging loans a good idea?

They can be a good option if you need fast, short-term funding. However, they usually come with higher interest rates than mortgages, so they’re best used when timing is critical.

Are bridging loans expensive?

Yes, they are generally more costly than standard mortgages because of their short-term, flexible nature. Costs include interest plus arrangement and legal fees.

Are bridging loans regulated by the FCA?

Most bridging loans in the UK are regulated by the Financial Conduct Authority (FCA) if they are secured against a residential property you live in. Commercial bridging loans are usually unregulated.

Are bridging loans easy to get?

Approval depends on the property value, your exit strategy, and your financial situation. With the right security and repayment plan, bridging loans can be arranged quickly, often within weeks.