Bridge Loans Explained: How We Move Fast on Deals
Speed is everything in property acquisitions. Here's how bridging finance works and why it's essential to our investment strategy.
When a property opportunity arises — especially at auction — speed is critical. Traditional mortgages take weeks or months; bridging finance can complete in days. This is how we secure deals that others can't.
What is Bridging Finance?
A bridge loan is short-term secured lending, typically for 6-18 months, used to "bridge" the gap until longer-term finance (like a mortgage) is arranged. Interest rates are higher than mortgages, but the speed and flexibility make it worthwhile for the right deals.
When We Use It
We use bridging finance for auction purchases (where completion is typically 28 days) and for properties that aren't immediately mortgageable — those needing significant work. Once the refurbishment is complete and the property is in mortgageable condition, we refinance onto a standard product.
The Numbers
A typical bridge loan might cost 0.5-1% per month, plus arrangement fees. On a 6-month refurbishment project, this might add 5-7% to total costs. For deals where we're creating 25-40% equity uplift, this is a cost well worth paying.