What is Bridging Loan?
A short-term business loan used to bridge a temporary funding gap, typically secured against property or other high-value assets.
The Details
Bridging loans (or bridge finance) are designed to provide immediate, short-term cash flow—usually from a few weeks up to 18 months. They are characterised by fast approval times and are used to "bridge the gap" while waiting for a longer-term financing solution to be arranged or a specific transaction to complete (such as awaiting the sale of an existing property to fund the purchase of a new one). Because they are short-term and carry higher risk for the lender, interest rates are typically higher than conventional mortgages and they usually require solid security and a clear "exit strategy" (how the loan will be repaid).
Commercial Relevance
For commercial property developers, landlords, or business owners buying at auction, bridging loans offer the speed required to seize time-sensitive opportunities that traditional bank lending cannot match.