A Guide – Bridging Finance

Bridging Finance Application Submission

Both bridging loans and development finance are specialised financing tools designed to meet specific needs within the property market. They can offer significant opportunities but come with their own set of risks and costs. It’s our responsibility to educate our clients on these products, how they work, and when they are appropriate to use, is vital to their success in utilising these financial instruments effectively.

Applying for a bridging loan involves providing a set of documents to the lender. These documents help the lender assess the risk associated with the loan and make an informed decision about whether to provide financing. 

It may all seem overwhelming but not to worry, our team have decades of experience helping clients with the application and will guide you at every step. 

Here’s a step-by-step guide to the types of documents and information you’ll likely need to prepare for a bridging loan application:

Step 1: Personal Identification and Financial Background

• Proof of Identity: Government-issued photo ID (passport, driver’s license) for all applicants to comply with anti-money laundering regulations.
• Proof of Address: Recent utility bill or bank statement (within the last 3 months).

Step 2 : Getting the terms from prospective lenders

We will carry out thorough research and use our expertise to select appropriate lenders for you. Once you agree on the terms we will go to the next steps.

Step 3: Financial Position

• Asset and Liability Statement: An overview of your assets (property, investments, savings) and liabilities (loans, debts).
• Proof of Earnings: Salary slips, tax returns, or any other documents that can prove your regular income.
• Bank Statements: Typically, lenders will request the last 3-6 months of bank statements to assess your financial management.

Step 4: Project-Specific Information

• Project Description: Detailed explanation of what you plan to do with the property (e.g., light refurbishment, heavy refurbishment).
• Asking Price and Comparables: Evidence of the property’s asking price along with comparables or recent sales of similar properties in the area to justify the price.
• Cost Estimates: Detailed quotes or estimates for the work planned on the property.
• Standard docs – Lenders will most likely require EPC, Gas Safe and EICR certificates. Keep them handy if possible!
• Planning Permission: If applicable, provide documentation of planning permission for the construction work.

Step 5: Team and Experience

• Team Overview: Details about the team you’re employing for the project, including contractors, architects, and any other key professionals.
• Experience and Track Record: Information about your and your team’s history and experience in similar projects. This could include a portfolio of past projects, highlighting successful outcomes.

Step 6: Exit Strategy

• Sale or Refinance Plan: A clear strategy for repaying the bridging loan, whether through selling the property post-refurbishment or refinancing to a longer-term loan product.

Additional Considerations

• Property Details: Full address, description, and photographs of the property.
• Valuation Pack: Our team will help you put a valuation pack together which will be extremely useful to obtain the right valuation for the property. Check if there is a recent valuation report of the property. Lenders would however require a valuation done by their approved surveyor. 
• Warranties: Lenders may have specific warranties and that may vary from lender to lender.
• Insurance: Again, the level of cover will vary from lender to lender. We partner with some great brokers in the country and will help you with this.

Submission Process

• Gather Documents: Start by gathering all the necessary documents. The requirements for the lenders may vary. We will help you put the pack together and work with you ate evry step of the process.
• Completing the Formal Application: We will assist in filling out the lender’s application form accurately and attaching all the required documents. Our expertise ensures that the application is complete and presents the project in the most favorable light.
• Managing the Review Process: Once submitted, we will keep the lines of communication open between your client and the lender. This involves responding to any queries, providing additional information as needed, and pushing for a timely review.

Acceptance and Legal Process

• Reviewing the Loan Offer: When a loan offer is received, we will review the terms with you, and advise on any areas of concern and negotiating with the lender on their behalf to secure the best terms possible.
• Guiding Through the Legal Process: We will coordinate with legal professionals to ensure that all legal requirements are met and that the loan agreement is executed correctly. Our understanding of the process helps to avoid delays and ensures a smooth transaction.

Our financial experts will help you at every step during the process.The more detailed and organised your application is, the easier it will be for the lender to assess the viability of your project and make a favorable lending decision. Providing comprehensive information upfront can help expedite the review process. 

We are here to help you at every step of the process, contact us to book initial consultation