Private lender bridge loan: what you need to know as bridging demand skyrockets

A private lender bridge loan can be thought of as a specific financial product offered by a private firm, as opposed to a mainstream bank or public body. Private bridge loans are primarily offered by specialist, bespoke lenders such as Market Financial Solutions.

They can come in many forms. There are standard residential or BTL bridging loans that allow investors to purchase properties at speed. Then there are the more niche options, such as auction finance, and developer exit loans.

The reason borrowers are likely to think of specialist lenders when private bridge loans are mentioned is because they’re unlikely to come across these products with high street banks.

Prior to the 2008 credit crunch, many of the big name lenders offered bridging loans. But, as the financial world imploded, mainstream lenders pulled their ‘riskier’ products from the shelves. This left the door open for specialist lenders, who were better positioned to handle risk, to emerge and support property investors.

Some high street banks still have indirect exposure to the bridging market. Institutional bodies can offer funding lines to bridging loan lenders, who in turn deliver those funds directly to borrowers.

The big banks largely haven’t returned to the short term lending market. As a result, borrowers need to have a clear understanding of the differences between the products offered by mainstream lenders, and bespoke lenders.

What are the differences between what banks and bridging lenders offer?

Generally, where property is concerned, banks provide regulated mortgages. Mortgages tend to follow stringent assessment processes, with strict criteria in place.

They’re underwritten based on the borrower’s income, financial position, and ability to repay the mortgage. Where issues emerge in an applicant’s background, it may lead to more costly repayments, or their application could be declined outright.

Whereas private lender bridge loans are unregulated, and can be delivered with flexibility and speed. Bridging finance is underwritten based on the underlying security property, strength of the investment, and feasibility of the exit strategy involved. This means bridging lenders can better accommodate borrowers who may have been turned away on the high street.

Private bridging loans are also solely utilised by property investors. Bridging borrowers will not be able to live in the properties they’re investing in, they will need a regulated mortgage for that.

The term “private bridging loans” could also concern the person doing the borrowing – i.e, a private individual. At Market Financial Solutions, we can accommodate individual borrowers from a range of backgrounds.

They could apply as an individual, as a self-employed worker, via their company, and more. Also, we’re happy to hear from LLPs, SPVs, trusts, and other corporate entities.

Demand for private lender bridge loans

Being clear on these parameters may prove crucial over the coming months. Demand for private lender bridge loans is reaching record heights alongside other types of bridging loans, and may only rise from here.

According to the latest data from the Bridging & Development Lenders Association (BDLA[1]), bridging loan books exceeded £10bn for the first time in Q4 2024. Completions also grew to a new record of £2.30bn, while applications rose by 3.9%. What’s more, a recent survey showed that 72% of intermediaries predict growth in the bridging market in 2025[2].

This expectation isn’t surprising given what we’re seeing in the market. Renting reform is likely to lead to a rise in CCJs[3], while insolvencies are on the up in the UK[4].

Having these kinds of issues in one’s background can make it difficult to attain finance on the high street. But, these are the exact kinds of issues that private lender bridge loans are designed to accommodate.

At Market Financial Solutions, we’re ready for those borrowers who may end up struggling with mainstream lenders. With multiple institutional funding lines behind us, we’re able to accommodate brokers from a range of backgrounds, representing all kinds of property investors.