A Broker’s Guide to
Everything You Need to Know
- What is a brigding loan explained in a comprehensive 30-page guide
- Gain a full understanding of this type of specialist finance
- Types & best uses
- Useful tools
- Market insights & growth
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What is a Bridging Loan - The Only Guide Brokers Will Ever Need
In this guide, we will break down everything brokers need to know about bridging loans and the specialist finance industry. We will explain what a bridging loan is, how they work, how brokers can incorporate them into their repertoire, and how they can reap the rewards from the benefits they bring.
To assist with this, we will highlight the available tools which can help brokers assess the products against their client’s specific circumstances. To help visualise how brokers can incorporate bridging finance into their own deals, we will also provide common case studies. These will show how bridging loans can work in practice, from enquiry through to completion. What’s more, we’ll highlight all the data, industry statistics, and outlooks that brokers need to know.
There is a lot to cover, but hopefully this broker’s guide breaking down what a bridging loan is will make things much more digestible.
What is a Bridging Loan?
A bridging loan is a short-term loan often over just a few months, designed to “bridge the gap” between financial transactions. Brokers often utilise bridging finance for property investment where funding is needed quickly, or their clients have unique or challenging circumstances. They can provide a route forward where borrowers may struggle against rigid mainstream lending tick-box criteria.
A bridging loan can be used, for example, when a broker needs funding quickly for a client who wants to buy a property fast. The client may want to jump on an opportunity, but is awaiting funds from the sale of another asset. With a bridging loan, a broker could help them secure the new investment, while they wait for the other sale to finalise.
Bridging loans can also help enhance an existing portfolio. Bridging finance can be put towards capital raises, refurbishments, and refinancing strategies. There are many scenarios in which brokers can utilise specialist finance beyond acquisitions.
How Does a Bridging Loan Work – Addressing the Key Categories
Regulated vs Unregulated Bridging Loans
Bridging loans are split into regulated and unregulated finance. Who lives in the underlying investment will be the determining factor between the two.
Brokers in need of funding for a client who plans to live in the property they’re purchasing will require a regulated loan. Regulated bridging loans share the same regulations as residential mortgages.
Unregulated bridging loans are used by those looking to use property as an investment. Those who will be renting properties out for income, selling them on for a profit, or otherwise utilising them for a potential return.
Brokers are more likely to utilise unregulated loans, which will serve their goals well – unregulated bridging loans tend to be more flexible than their regulated counterparts.
Open vs. Closed Bridging Loans
There are also “open” and “closed” bridging loans. The differences between the two mainly lie in the exit strategies involved.
Open loans are issued without a defined exit strategy in place. There may be an overall deadline, but the borrower will not need to have an exact plan for how it’ll be met.
Closed loans are those where an exit strategy is established before funding is issued. This provides security for both borrowers and lenders, how a loan can be repaid.
Brokers will likely primarily work with closed bridging loans. Most bridging lenders will not deliver funding without a clear, evidenced exit strategy available. In fact, when it comes to bridging finance in general, brokers should ensure their clients have got the exit strategies covered.
What is a Bridging Loan Exit Strategy?
Exit strategies broadly define the plans borrowers put in place to repay their bridging loans. Bridging finance offers a short-term solution, so a long-term plan will be needed.
For property investment, there are two common exit strategies available. Brokers typically focus on refinancing onto long-term financial solutions, such as mortgages, or selling an asset to cover the bridging loan.
There may be many exit strategies available to borrowers, and brokers will need to ensure they match up with the deal at hand. But no matter what method is used, it’s essential to have a clear plan in place. Bridging lenders will focus on an exit strategy when assessing an application.
Who Can Use a Bridging Loan?
Bridging loans are available to individual borrowers as well as companies, the self-employed, trusts, and more.
Funding is also available for foreign nationals, and offshore entities. Bridging loans are commonly used by property investors, developers, and landlords who may have complicated backgrounds and need access to fast, flexible capital.
Most bridging loans in the market will be applied for by brokers, rather than direct borrowers. What’s available to brokers will also be dependent on what mortgage clubs or networks they’re registered with.
Bridging Loans Explained for Brokers: When They Fit
Bridging loans can be used for a range of property investments. This can include the purchasing of property, be it a residential asset, commercial space, or an auction bid, among others.
Bridging loans can also be used for property already owned. Funding can be issued for light refurbishment work or more substantial conversion plans. Also, property owners can utilise bridging loans for refinancing or second charge strategies.
While bridging loans are typically used for property investment, the funds can be used for a range of financial or commercial interests. A borrower, utilising a property as a security, could use the capital to invest in their business.
Brokers can also use bridging loans for their more complicated cases. Overseas investors, for example, can utilise bridging loans to enter the UK property market more easily. It can be difficult for foreign nationals to raise funds with mainstream lenders. More red tape could be involved, which may hinder their ability to jump on an opportunity. Brokers can utilise the flexibility that bridging loans provide to allow easier access to the UK market for overseas borrowers, or foreign nationals.
Generally, bridging loans can be used to address a range of short-term issues that may arise. Brokers will come across many chain-breaks in their careers, as property investment is often dependent on a group of connected buyers and sellers.
Their client may want to buy a house, but have to wait until the seller buys their next home, and their client sells a previous one. Where this chain breaks, a bridging loan could allow the client to secure the onward asset while alternative buyers are found.
Additionally, if a borrower is coming to the end of a major development project, a broker can use a bridging loan to provide them with a bit more time to secure tenants for the underlying units. Bespoke finance could provide some breathing space for this, and help them avoid selling units at a loss just to make a deadline.
What is the Process?
We now know what a bridging loan is, but how do they work? The bridging loan application process will vary from lender to lender. At Market Financial Solutions, we underwrite from day one of an enquiry, so our brokers are guided through the process.
We follow a simple five step process. We receive a loan enquiry, which can come to us over the phone, through email, or via our website. We will issue indicative terms, which are subject to credit approval and receipt of certain information. A decision in principle will be issued, subject to valuations, due diligence, legal terms, and other assessments.
After this, valuers and solicitors will be instructed to act, and commitment fees will be paid. Beyond this, legal paperwork is issued. The loan itself will then be drawn down for the property investment and the commitment fees are refunded.
When brokers apply for a bridging loan, lenders will add a charge against the asset being used as security. This will be needed to secure the loan. There are two types of charges available, which will be dependent on the investment at hand.
First charge loans are, as their name suggests, the first form of borrowing secured against a property. Mortgages are the most widely used example. However, first charge bridging loans are also common. Second charge loans are less common and are issued where there is already finance secured against the property – this can take the form of another mortgage or bridging loan.
If a property with loans secured against it became repossessed and is sold off to cover what’s owed, first charge lenders would receive repayments first. Second charge lenders would only receive repayments after the first charge had been satisfied. This makes second charge loans riskier for lenders and as such, they typically have higher interest rates.
What Is a Bridging Loan Secured Against?
Bridging loans are usually only secured against a property, or multiple properties. Some lenders may accept another form of asset to secure a loan against – known as asset finance. This could include commercial equipment, luxury cars, jewellery, artwork, and more. At Market Financial Solutions, we only secure our loans against properties.
In unregulated bridging, the properties being used as security must not be lived in by the borrower, or a member of their immediate family. The loan must be used for investment purposes. If a broker is securing finance for a residential home, it must be then rented out, sold on for a profit, or otherwise used for a transactional purpose. Some lenders will offer regulated bridging loans.
As bridging loans are secured against existing assets, they are not directly linked to a borrower’s income. This may make them suitable for those with complicated financial records. Where residential mortgages are primarily centred around an applicant’s income, secured bridging loans are focussed on the property and exit strategy at hand.
Brokers are unlikely to come across unsecured bridging loans. Unsecured loans are generally available, but these will not be bridging products. Common examples include student loans, personal loans, and credit card debts.
What Are a Bridging Loan’s Benefits?
Bridging loans can present many benefits for brokers and their clients. Bridging products tend to be flexible and bespoke, providing optionality for brokers representing buyers with complicated histories. They tend not to adhere to tick-box lending criteria and can be shaped around many different property types and circumstances. Bridging loans can support those who may be held back by adverse credit histories, or complex company structures.
Bridging loans can be issued at speed. In some instances, funding can be delivered within mere days. This can help brokers who need capital fast to cover unexpected issues or delays. Those at risk of being out-bid, gazumped, or seeing a property chain fall through can progress comfortably.
This specialism may also help brokers who are struggling to get far on the high street. While some mainstream lenders may offer bridging products, they’re unlikely to promote them. Generally, the banks that do offer specialist lending only do so at the higher commercial and private banking level. Their specialist products may be inaccessible for most brokers in the property market.
The Costs of Bridging Loans Explained
The costs of a bridging loan will vary between lenders. Brokers need to be mindful of the fact that the costs involved will be highly dependent on their client’s circumstances.
What’s paid will depend on the loan-to-value (LTV) ratio, the term of the loan, the asset being invested in, the client’s financial background, and numerous other factors. The applicable interest rate will also be affected by the wider health of the economy, and the Bank of England base rate. If the base rate rises, interest rates in the market are likely to rise, too.
The interest rate, term, and type of loan being applied for will have the biggest impact on the final costs. But, a number of fees may also be applicable. Bridging loan lenders are likely to levy product fees, broker fees, valuation and survey fees, drawdown fees, exit fees, and more. At Market Financial Solutions, as we underwrite from day one, and brokers will not be hit by any unexpected costs.
We have no admin fees and commitment fees are refunded on drawdown. Across all our bridging products, there is an arrangement fee starting from 2% of the loan amount. There may also be an exit fee, with the price determined on application.
All our bridging loans have a minimum term of 3 months, and a maximum of 18 months. Generally, the longer the term, the higher the costs may be. It should be remembered that bridging loans are designed to be short-term solutions. Meaning that while the costs may be relatively high initially, the goal is to exit the loan as soon as possible and move onto a long-term solution.
Bridging Loans Explained: The Broker Checklist
Our underwriters will guide brokers through the process but generally, there are four key elements that we look into when an enquiry comes across our desk. Brokers should have these elements in mind before they progress with a bridging application for their client.
The Borrower
We need a profile on the underlying borrower. In terms of what the broker should prepare, an asset and liability statement is one of the first things we ask for.
The Property
We need to know the key details of the security property to ensure we match it to the right product. If it’s a residential property, we need to determine its type – a flat, a home, an HMO etc. If it’s commercial, we need to know if it’s a shop, a restaurant, or an office.
The Purpose
What is the borrower investing for? Are they purchasing a property to sell for a profit, or refurbishing an asset to increase its value? The specifics will determine how we deliver finance.
The Exit
Arguably, the most important part of any bridging loan. Our underwriters need to know how the loan will be covered. We largely work backwards from a clear, evidenced exit strategy, making sure everything lines up in the interim.
Different Types of Bridging Loans
We have several types of bridging loans available. Each can be tailored to individual circumstances, depending on the underlying property investment strategy, from expanding a property portfolio, through to refurbishing a home.
Buy-To-Let & Residential Bridge Loans
Residential and buy-to-let bridging loans are designed for property investors who are looking to purchase a variety of residential assets. This often takes the form of a buy-to-let property which will have a single tenant or family living in it; a property which an investor will purchase, renovate and then sell on; or an HMO, where multiple tenants will inhabit a property on separate tenancy agreements.
These loans are generally used to “bridge the gap” between purchases. For residential investments, this often involves securing an asset where a chain breaks, or jumping on an opportunity while long-term finance is organised in the background.
The investments themselves can also take on many forms. Including regular homes, new-build apartments, student housing, or holiday lets.
Large Bridging Loans
Large bridging loans are used for substantial investments, which can stretch across residential, commercial, semi-commercial, and newly developed properties. Typical examples of what these large loans can be used for include prime London properties, or multiple units in a single building, such as a block of flats.
Those with big projects on the horizon can also utilise large bridging loans. They can be used commercially for those who plan to expand a business, or by property investors who want to convert an office block into luxury flats. They can also allow large portfolio owners to refinance and consolidate their assets.
Commercial & Semi-Commercial Bridging Loans
Commercial bridging loans are used for commercial properties – those that are utilised for business purposes. The property will house a company and/or its employees. This will include obvious examples such as offices or shops, but can also stretch to larger or more niche sectors. Commercial loans can also be used for warehouses, logistic hubs, restaurants and more.
Semi-commercial bridging loans are used for “mixed-use” properties. This means both residential and commercial elements exist in the same space. A flat situated above a pub will likely need a semi-commercial loan.
Permitted & Light Development Bridging Loans
Refurbishment loans can be used to invest in properties in need of sprucing up. This can range between basic cosmetic changes, such as redecorating, or more labour-intensive endeavours, such as renovations or conversions. These loans can be used wherever refurbishment work is needed, regardless of whether a borrower is doing it for financial, legislative, or restorative purposes.
They can also be used to upgrade a residential asset, which may then generate higher rents. Or, they can be used to fund upgrades to a manufacturing centre, taking a business to the next level.
The funding can also address certain legislative requirements. A property investor may discover that their property does not meet new EPC requirements, for example. Refurbishment loans can support them through these issues.
Development Exit Loans
Development exit finance can help borrowers secure more time and breathing space to finalise their development plans and cover the original development finance taken out elsewhere.
This funding can help finish last minute works, figure out long-term financial solutions, or find the right buyers for a development. The loan can be used for residential development projects of varying sizes.
Ground up development projects often take a great deal of time, leaving a lot of space for unexpected problems. A refurbishment can face delays, the economy may shift, and/or contractors could go out of business. Despite these issues, an overall project will still likely be up against a tight deadline. Development exit loans can help where investors are at risk of missing out, or need more time to secure the right buyers paying the right price.
Auction Bridging Finance
Auction bridging loans can help lock-in a property bought at auction, which will be subject to a looming deadline. Typically, once a property is bought via a winning bid, buyers have less than a month to complete the transaction. Auction houses usually require funding within 28 days.
This leaves bidders with little time to act. Fortunately, auction loans can be issued in a few days, where brokers have everything lined up. This allows bidders to secure the residential or commercial asset, and get the ball rolling on a long-term financial solution.
Foreign Nationals/Overseas Bridging Finance
Overseas bridging finance can provide funding for property investors based abroad who want to invest in UK residential or commercial property.
Specialist finance products can help foreign nationals who may struggle with mainstream lenders. Overseas buyers are likely to face enhanced due diligence and red tape with high street banks. This could slow things down, preventing an investment from moving forward.
The flexibility of bridging loans can help overcome these potential problems.
Complex Bridging Loans
Complex bridging loans are designed to help those with particularly complicated backgrounds. They could support borrowers who are investing through a complex corporate setup, or who have large debts, for example.
The property being invested into may also be the complication. If it’s a large building, with lots of units and moving parts, a more niche loan may be required. Brokers may also be in need of a complex bridging loan where multiple types of assets are coming together at once. For instance, they may need this funding if they’re working on a case involving a restaurant, with a tenanted residential flat above it, along with a garage.
Second Charge Bridging Loans
Second charge bridging loans will allow borrowers to raise capital against a residential property which already has a first charge loan secured against it. Often, this first charge will be a long-term mortgage. Second charge finance will allow them to utilise a property without needing to re-mortgage, or move onto different terms.
This funding can support a range of property investment plans, from refurbishments through to expanding a commercial project. However, to attain second charge funding, borrowers will need to have permission from their first charge lender.
They can use this funding where speed is of the essence. High street banks can take a long time to release funds from an existing asset. Whereas specialist lenders can deliver funding in mere days. And while borrowers will need permission from their first charge lender to move forward, it’ll be up to solicitors involved to organise this.
Refinance Bridging Loan
Refinancing bridging loans allow borrowers to replace existing finance secured against an asset. Investors may seek out this option where certain plans have fallen through and more time is required. For instance, their current finance may have run out before they had a chance to complete their project, or their original exit strategy is no longer viable.
They may also seek out refinance if it results in cheaper rates or more favourable terms. What’s more, investors may be able to refinance more than once should they need to raise additional funds for expanded business or property plans.
Bridge Fusion Loan
A Bridge Fusion loan is a custom product by Market Financial Solutions that blends the best features of bridging and bespoke BTL lending. It is there for brokers in need of longer-term finance, offering competitive annual rates for single properties and large portfolios. With annualised rates and a longer term than standard bridging, it provides borrowers with greater flexibility and breathing space.
This product allows borrowers to wait out uncertainty and instability in the market.
What’s important for Bridge Fusion loans and indeed, for all bridging products, is having an exit strategy in place. Specialist lenders will not issue funding without a confirmed exit strategy, which will allow brokers and the lender to move forward with confidence.
Useful Tool: Bridging Loan Calculator
Our bridging loan calculator is a free-to-use, interactive tool that allows brokers to calculate how much their client may be able to borrow, what will need to be repaid, and whether the required funding can be provided.
The calculator requires a few basic details on the investment and the costs will be updated in real time. Users must remember however, that the results will be calculated estimations. To get exact quotes, they will need to work with one of our underwriters.
The calculator just needs some basic details. To start with, we’ll need to know the type of charge the user is after, the property type they’re looking at, and the specifics of the asset (if it’s a large property, if it’s a BTL asset etc.).
We’ll then need some financial inputs. This includes an expected gross loan amount, the property’s value, the minimum term required, and a few other details.
Once all the information is entered, the quote can be emailed to the broker or client. They can then reach out to our teams to get the ball rolling.
Market Insights: Bridging Industry in Focus
“The bridging market saw renewed growth in Q3 2025, with lending and application volumes both rising after a slight cooling in the previous quarter, according to the latest figures from the Bridging & Development Lenders Association.” (BDLA)
“Completions totalled £2.5 billion in the three months to the end of September, representing a 9.6% increase on Q2 2025 and 42% higher than the same period last year. Applications also grew to £11.4 billion, marking an 11.8% quarterly rise and continuing the year-on-year upward trend.
The total value of lender loan books climbed for a third consecutive quarter, reaching a record £13.7 billion – up 4.3% on June and 51.6% higher than September 2024.” (BDLA)
“Average bridging loan completion times have fallen to 43 days, the lowest figure since 2017. The most popular use of a bridging loan in 2025 was to fund an investment purchase; this accounted for 20% of all bridges, up from 19% in 2024.” (Bridging & Commercial)
“The number of bridging loans taken out rose 108 per cent between 2020 and 2024, according to Financial Conduct Authority data. Peter Williams, chief executive of Propp, a property finance comparison site, says in today’s market, when it’s taking longer to sell, bridging loans are becoming normal for time-sensitive purchases.” (The Times)
“Market Financial Solutions has reaffirmed its long-standing commitment to raising educational standards across the specialist lending sector, continuing to invest heavily in both client-facing and internal training initiatives.
Recognising that specialist finance can be a complex sector to navigate, and as economic and regulatory change continues to shape the market, the London-based lender is focussed on ensuring that brokers, partners and staff have access to clear, practical and high-quality educational resources.
The content has been accessed by a wide range of people, with brokers, advisors, accountants, consultants, estate agents, estate managers and Market Financial Solutions’ own staff all engaging with both in-person events and its online CPD Training Hub.
Throughout 2025, Market Financial Solutions has delivered more than 40 educational presentations to brokers and property professionals, covering topics ranging from specialist lending solutions to market trends and case-study-led best practice.
The lender’s commitment has been strongly reflected in brokers’ engagement throughout 2025. CPD participation has risen 62%, with structured CPD hours completed increasing to 615 hours in 2025.” (Market Financial Solutions)
How Does a Bridging Loan Work in Practice – Key Examples That May be Familiar to Brokers
Case Study 1
Bridging finance can support investments of all shapes and sizes. Property investors can utilise bridging loans to expand their portfolios in the residential and commercial markets. But aside from the obvious uses, specialist finance can be tailored to a range of unique circumstances.
For instance, we supported an investor who needed funding to move their business forward – and not to invest in a property. The client required a second charge loan, secured against their main residence, urgently. High-street lenders were unlikely to provide what was needed in time, so we quickly assessed the case to meet the looming deadlines.
To progress the application, we examined the client’s wider assets to make sure the loan sat on solid foundations. We also determined the secured asset was valued accurately, and the client’s long-term business plans were sound. With these assurances in place, coupled with a strong refinance exit strategy, we were able to deliver funding.
Case Study 2
We can also support those improving what they already own, as opposed to investing in something new. A broker turned to us for their client’s refurbishment plans, where they planned to spruce up their property in a bid to boost its rental potential.
Our underwriter came up against a number of issues in the borrower’s background. But, by working closely with valuers and gathering a clear schedule for the works, we were able to move forward comfortably.
Case Study 3
Brokers representing foreign nationals regularly approach us for support, knowing we can issue funding even to those living abroad. Such was the case with a borrower who was facing pressure to complete on a commercial deal.
With few UK assets to assess the case against, our underwriter teamed up with the surveyors involved to determine if the underlying property held enough potential to justify the loan. What’s more, as we saw that there were multiple exit strategies available, we were able to guide this investor into their first UK venture.
What is a Bridging Loan – in Conclusion
Bridging finance has come to the forefront of the lending industry in recent years and there’s a reason for this. As the wider market became more competitive, and mainstream providers tightened their criteria, more bespoke solutions became essential.
Where the wider economy takes its toll, bridging finance will be there to keep property investors afloat. Bridging loans are available for those who may have less-than-perfect financial records, blips on their credit histories, or other issues preventing them from getting ahead on the high street.
The world is becoming increasingly complicated. One size fits all approaches simply won’t cut it anymore. Brokers in need of financial products tailored to their client’s circumstances will likely find what they need in the bridging industry. So long as the security asset holds potential, and the exit strategy is clearly defined, we want to hear from them.
Market Financial Solutions are a bridging loan and buy-to-let mortgage provider and are not legal, financial, investment or tax advisers. This document is for informational purposes only and does not, and should not be considered, to constitute legal, financial, investment or tax advice or be relied upon by any person to make a legal, financial, investment or tax decision. Therefore, Investors are encouraged to seek appropriate professional advice. The information in this content is correct at time of writing.