Bridging Loan Criteria Explained Easily

What is a bridging loan?

A bridging loan, often referred to as bridging finance, is a short-term financing solution designed to bridge the gap between the purchase of a new property and the sale of an existing one.

It provides immediate funds to cover the purchase, renovation, or development of the property, ensuring that transactions can proceed smoothly without delays.

Bridging loans are typically used by property developers, investors, and homeowners who need quick access to capital.

What are the lending criteria for a bridging loan?

The lending criteria for a bridging loan can vary depending on the lender, but generally include the following:

  • Property Value: The value of the property being used as security is a primary consideration.

  • Loan-to-Value Ratio (LTV): Most lenders offer bridging loans up to a certain percentage of the property's value, typically up to 80% LTV for residential properties and 70% for commercial properties.

  • Exit Strategy: Lenders require a clear plan for repaying the loan, such as the sale of the property or securing long-term financing.

  • Credit History: While not as stringent as traditional loans, a reasonable credit history is still important.

  • Experience: For property developers, experience in similar projects can be a significant factor.

  • Terms: Loan terms typically range from 1 to 24 months.

  • Minimum Loan Size: £50,000.

  • Maximum Loan Size: No maximum.

  • Minimum Interest: 0.45% per month.

  • Interest Treatment: Interest can be rolled, retained, or serviced.

  • Borrower Residency: UK residents, UK expats, and non-UK nationals (limited options for UK property).

  • Borrower Type: Individual, sole trader, LLP, partnership, Ltd company.

  • Security Types: Residential, commercial, and semi-commercial property (1st & 2nd charge).

  • Funding Purposes: New builds, refurbishment, conversions, grade-listed buildings, mixed schemes, development, and more.

  • Planning Permission: Required on a case-by-case basis.

If you already know you can't meet some of the see requirements, don't worry, check out our alternatives to bridging loan blog to discover other ways to get the financing you need.

Is it hard to get a bridging loan?

Obtaining bridging finance can be easier than securing traditional financing, primarily due to the less stringent credit requirements and faster loan approval processes.

However, the ease of obtaining a bridging loan largely depends on the strength of the security (property) and the clarity of the exit strategy.

Lenders are more likely to approve applications that demonstrate a solid plan for repayment and sufficient collateral.

Are bridging loans based on income?

Bridging loans are not typically based on income in the same way as traditional mortgages. Instead, lenders focus on the value of the property being used as security and the borrower's exit strategy.

While providing proof of income may be needed, it is not the primary factor in the bridging loan criteria.

This makes bridging loans an attractive option for those who may not meet the income requirements of conventional loans.

Can you be refused a bridging loan?

Yes, it is possible to be refused a bridging loan. Common reasons for refusal include:

  • Insufficient Property Value: If the property does not meet the lender's valuation criteria.

  • Weak Exit Strategy: If the lender is not convinced of the borrower's ability to repay the loan.

  • Poor Credit History: While not as critical as with traditional loans, a very poor credit history can still lead to refusal.

  • Inadequate Documentation: Failure to provide necessary documentation can result in a declined application.

What is the minimum credit score required?

There is no universal minimum credit score required for a bridging loan, as criteria can vary between lenders.

However, most lenders prefer a credit score that demonstrates a reasonable level of financial responsibility.

While some lenders may accept lower scores, a higher credit score can improve the chances of getting past the bridging loan criteria.

How long does the approval process take?

The loan approval process for a bridging loan is typically faster than that of traditional loans.

Depending on the lender and the complexity of the application, approval can take anywhere from a few days to a couple of weeks.

The expedited process is one of the key advantages allowing borrowers to access funds quickly when needed, as long as all of the bridging loan lending criteria are met.

What are the key eligibility requirements?

Some other Key eligibility requirements for a bridging loan generally include:

  • Property as Security: The borrower must provide a property as collateral for the loan.

  • Clear Exit Strategy: A well-defined plan for repaying the loan.

  • Reasonable Credit History: While not as critical as for traditional loans, a reasonable credit history is still important.

  • Sufficient Equity: The borrower must have enough equity in the property to meet the lender's LTV ratio requirements.

Are there any hidden fees to consider?

When considering a bridging loan, it is important to be aware of potential hidden fees, which can include:

  • Arrangement Fees: Fees charged by the lender for setting up the loan.

  • Valuation Fees: Costs associated with valuing the property used as security.

  • Legal Fees: Fees for legal work related to the loan agreement.

  • Exit Fees: Charges for early repayment of the loan.

  • Broker Fees: If a finance broker is used, their fees should also be considered.

Is property valuation crucial for approval?

Yes, property valuation and its location are crucial for the approval of a bridging loan.

Lenders rely heavily on the value of the property being used as security to determine the loan amount and assess the risk.

An accurate and favourable valuation can significantly impact the loan approval process and the terms of the loan.

Can't meet these bridge loan criteria?

If you are reading this thinking that you can't possibly meet some of these criteria, don't lose hope.

There are dozens of great bridging loan alternatives that can serve many financing needs.

In our recent blog, "best Alternatives to bridging loans", we go over everything you need to know to ensure you can get the financing you need.

Alternatively, if you can meet each and every one of these eligibility points then read on to find out how we 

Should you use a finance broker?

Using a finance broker can prove very helpful, especially if you are unsure about the bridging loan criteria, a finance broker will help you with this.

Access to a Wide Range of Lenders

Brokers have access to a broad network of lenders, including those not typically available to the general public.

This means they can find competitive rates and terms that you might not be able to secure on your own.

Negotiation Power

Brokers often have established relationships with lenders and can negotiate better terms and rates on your behalf.

This can result in more favourable loan conditions and potentially lower costs.

Tailored Solutions

A finance broker can assess your unique financial situation and recommend the most suitable bridging loan options.

They can tailor their advice to ensure the loan meets your specific requirements and exit strategy.

Simplified Process

The application process for a bridging loan can be complex, involving various documentation and legal requirements.

A broker can guide you through each step, ensuring all paperwork is correctly completed and submitted.


While brokers charge a fee for their services, the savings they can secure through better loan terms and rates often outweigh the cost.

Additionally, they can help you avoid potential pitfalls that could result in costly mistakes.

Ongoing Support

A good broker will provide ongoing support throughout the loan term, assisting with any issues that arise and helping you manage your repayments effectively.

In summary, using a finance broker can provide you with expert guidance, access to a wider range of lenders, and potentially better loan terms, making the process of securing a bridging loan smoother and more efficient.

Finance Nation

If you want to dive straight into exploring bridging loan options, you're already in the right place.

Our experienced team understands the challenges faced by people looking for the most time and cost-effective solutions, and we're here to help.

With our cutting-edge Fintech platform, we ensure seamless access to tailored finance solutions that suit your needs.

With access to lending products you won't find elsewhere, we'll identify the best deal for you and keep things moving until the funds are where they need to be. 

Contact us now and we will arrange a call to discuss your financial needs along with your next best step forward!