Personal Bridging Loans

In theory, there are no limitations to using a personal bridge loan. You might want to use this type of finance to renovate or refurbish your home, buy more property, fund a project or business you are working on, invest or buy assets – whether these are for investment purposes or your own enjoyment, like a boat, for example. 

You can also use a personal bridging loan if you have a situation where you have a gap in cash flow or capital, but you need money, for example, to cover your day-to-day living expenses or because you need to invest in a project or buy something quickly. You can use this type of finance in these situations, but it's imperative to note that while you can use a (get rid of personal) bridging loan to cover the gap in your finances, you'll need to show you have a solid exit strategy. You can use a personal bridging loan to get you out of a temporary tight spot when it comes to your cash flow, but you won't be able to use this finance if you're in financial trouble or shifting a problem by taking out a bridging loan you won't be able to repay. If you can show that your problem is only temporary and that you'll come into a large sum of money or will generate income in the future that will put you on a sound financial footing in the future, a personal bridge loan is usually an excellent option you can explore. 

While lenders can consider almost a personal bridging loan to finance nearly any kind of project, there are some criteria you will need to meet. Above all, the loan must be affordable, and you will need to show that borrowing is responsible in terms of costs, your plans and that you are not overstretching yourself financially. This is especially important if you're funding a project that's not strictly necessary, so luxury assets or investments in projects that are great opportunities but are not strictly essential. 

One of the biggest benefits of a bridging loan for you as a borrower is the flexibility of this type of finance. Lenders can consider lending in all sorts of situations to help you achieve different objectives. Low income is not necessarily a problem, and lenders can offer loans even if you are currently experiencing a dip in income or a cash-flow problem that you want to solve by raising debt. Provided you are borrowing responsibly, can afford the loan, and have a strong exit, personal bridging loans are usually possible. 

Lenders can also offer various amounts – smaller loans of about £20,000 or more are just as possible as more significant deals of £1 million or more. The value of your property, plans and exit will influence what you can borrow, but if your finances and exit add up, you can borrow almost any amount. 

Another of the main advantages of this type of finance is speed. We can work to secure initial offers for a personal bridging loan in 24 hours, and you can usually draw down funds in a couple of weeks, although we can complete deals in 7 days if you need funds quickly. This is especially useful if you are experiencing a cash-flow gap and need to access capital fast to see you through until your financial situation improves or you sell your property. 

Personal bridging loans are secured against a property, meaning that you may lose your home if you can't exit or keep up with any repayments. You should always take personal advice if you are considering any kind of lending to ensure you know the risks and the ins and outs of the deal a lender has offered you. You'll also need to know about any additional costs you'll need to cover that aren't immediately obvious when you're trying to access this type of loan. 

Personal bridging loans are very competitive in terms of cost, but they can be more expensive than conventional loans and mortgages. This is because they're designed to be used flexibly, there is sometimes more risk for the lender, and they are always short-term – around 12 months is standard, although some lenders will offer more or will allow you to extend under certain circumstances. 

Usually, you can borrow up to about 70% LTV for a personal bridging loan, but some lenders will offer less. Lenders will consider you if you need to fund a gap in personal cash flow, for example, but in these cases, lenders will usually offer a lower LTV to ensure they do not take on too much risk. 

When we broker a personal bridging loan for you, we will need to be able to explain to lenders exactly how you will pay the loan back – this is called your exit. If lenders have doubts about how you will exit the loan, you won't be able to borrow.

Refinancing or selling your property are some of the most common exit scenarios for this type of finance. In other cases (especially if you are using the loan to bridge a gap in your finances or cash flow), you might want to use capital from another source to exit the loan. They might be an inheritance, divorce settlement, business sale and so on. Lenders will be open to any scenario, provided they have confidence in your plans and believe you can deliver on them.