Market-leading ratesDirect lenderAll scenarios coveredFast approval and completionInstant quotationsOpen 7 days until 95* reviewsWhen it comes to securing funds for property purchases, business projects, or personal needs, timing can be critical. Bridging loans have gained popularity for their ability to deliver funds quickly compared to more traditional financing options. This web page explores how bridge loans measure up to other financing alternatives in terms of speed, approval times, and accessibility.
A bridging loan is a short-term financing option designed to "bridge
the gap" between the need for immediate funds and long-term financial arrangements.
These loans are typically used in real estate transactions to fund property
purchases before securing permanent financing or in situations requiring urgent
cash flow.
While other forms of funding, such as bank loans, government grants, or crowdfunding,
offer benefits like lower interest rates or no repayment obligations, they often
lack the immediacy required for urgent financial situations.
Bridging loans are known for their rapid approval process, making them an attractive choice when time is of the essence. See below how bridging loans differ from various other lending avenues and see for yourself how bridging loans stand out as the fastest and most flexible financing option.
Bridging Loans
Approval Time: 24-72 hours
Funds Received: Within 5-7 days
Bridging loans are specifically designed for speed. The approval process can be as quick as 24-72 hours, with funds often being made available within a week. Because they are secured against property or other assets, lenders can offer faster approval compared to other types of loans. These loans cater to borrowers who need immediate access to funds, making them ideal for time-sensitive situations like property auctions or urgent business opportunities.
Traditional Bank Loans
Approval Time: 1-4 weeks
Funds Received: 4-8 weeks
Banks offer personal, business, and property loans, but their approval process is notably slower. Stringent requirements, including credit checks, financial assessments, and extensive documentation, can delay the approval for weeks. Even once approved, disbursement of funds can take several more weeks. This makes traditional bank loans unsuitable for situations requiring fast access to capital.
Government Grants and Loans
Approval Time: 2-6 months
Funds Received: 3-12 months
Government loans and grants often come with specific eligibility criteria and a lengthy review process. Applications may need to pass through several stages, including evaluations by multiple departments, making the overall process slow. While government grants and loans offer favourable interest rates or are non-repayable, they are ill-suited for urgent financial needs due to their long lead times.
Private Equity Financing
Approval Time: 4-6 weeks
Funds Received: 6-12 weeks
Private equity financing can be a great option for businesses looking for large investments without the hassle of traditional loans. However, the process involves extensive negotiations, due diligence, and legal paperwork, which can take several weeks to months to finalize. This makes it a slower option compared to bridging loans, despite the potential for larger capital investment.
Crowdfunding
Approval Time: 2-8 weeks (variable)
Funds Received: Dependent on campaign success
Crowdfunding platforms like Kickstarter, GoFundMe, or Seedrs allow individuals and businesses to raise funds from a large pool of backers. However, the speed of this method is unpredictable, depending on how quickly backers contribute to your campaign. It can take weeks to months to raise the necessary capital, and there’s no guarantee that the full amount will be reached. This makes crowdfunding a slow and uncertain option when time is critical.
Venture Capital
Approval Time: 6-12 months
Funds Received: 12+ months
Venture capital financing is another option for startups or businesses with high growth potential. However, similar to private equity, the process is incredibly lengthy. Securing funds from venture capitalists involves multiple rounds of meetings, business assessments, and legal agreements. It can take over a year to receive funding, making it one of the slowest options compared to bridging loans.
Clients approach UK Bridging Loans either directly or via introducers. Basic questions by way of a “fact-finding” process are used by UK Bridging Loans to determine if the lending requirements are a possibility.
An immediate yes or no answer is given, and if suitable, a quotation is formulated and forwarded to the client, usually by email.
A formal offer is produced for any client wishing to proceed and forwarded for signature, again, usually by email.
Each client is visited at the security address for the signature of the remaining loan paperwork, including a CH1 land registry charging order. We will also collect any additional pre-requested documentation.
The signed documentation was immediately sent to our underwriters. Our model is based on very quick completions, as each deal is funded using all of our own money. On rare occasions, we may request additional information.
Average completion from initial acceptance to pay-out is usually just a few days. We rarely require valuations or additional legal representation. The land registry charge will be removed once the bridging loan is repaid.
The applicant could be too old to obtain a standard high-street mortgage, as most mortgage lenders now prevent borrowing beyond what is deemed “normal retirement age”.
The property may be in a condition where it is not suitable for mortgage financing, and as such, a bridging loan could be used to complete the purchase and any required work prior to refinancing.
The applicant may have had some adverse credit, however minor, which was previously acceptable to lenders but now no longer fits the high street lending criteria.
The applicant may have difficulty proving the income requirements needed for more regular financing. This may be due to poor self-employment records, a break from work, a reduction in self-employed workloads, or overtime.
Superfast completion, often within days
Land, with or without planning 2nd charge (consent is not always required) Quick auction finance 3rd charge (consent is not always required) Adverse credit is considered 2nd charge behind the bridging lender 2nd charge behind the equity release lender Up to age 85 Pure equity-based lending Residential and commercial Valuations are not always required Loans from £25,500 A free legal option No monthly paymentsWhy are bridging loans so fast?
Less Documentation: Unlike traditional banks that require comprehensive financial statements and credit checks, bridging loan providers focus more on the value of the secured asset (e.g., property).
Streamlined Approval Process: Many lenders have simplified their application processes, making decisions quickly based on the asset's valuation rather than a full credit assessment.
Specialised Lenders: Bridging loans are offered by lenders who specialise in quick turnarounds, meaning they prioritise speed to cater to clients who need immediate funding.
How fast can I get a bridging loan?
The approval process for a bridging loan can take as little as 24-72 hours, with funds often disbursed within 5-7 days after approval.
Can I use a bridging loan for urgent property purchases?
Yes, bridging loans are commonly used for time-sensitive real estate transactions, such as property auctions where quick financing is required to secure a deal.
Is the approval process for a bridging loan faster than a bank loan?
Yes, bridging loans are much faster to approve compared to traditional bank loans, which can take several weeks for approval and funding.
What factors affect the speed of bridging loan approval?
The main factors are the value of the asset being used as security, the clarity of your financial situation, and how quickly you can provide the required documentation (typically less than what’s needed for traditional loans).
Can I apply for a bridging loan if I have bad credit?
Yes, bridging loans are secured against assets, so lenders are often more flexible with credit history. This can speed up the approval process even for those with less-than-perfect credit.
Are there risks associated with fast-bridging loans?
While bridging loans are fast, they typically come with higher interest rates and fees. It’s essential to ensure that you can repay the loan or have long-term financing in place to avoid defaulting.
Funding is provided for all manner of development needs, from light to heavy refurbishment or a complete development build.
A bridging loan can be a good way to stop yourself from falling into bankruptcy, giving you an urgent cash injection when needed.
Business finance can be obtained through bridging finance and can be used for a variety of purposes for your business.
Consolidate your debts into one monthly payment by using a bridging loan to bring your finances back into shape.
An unexpected tax bill could create a real strain on finances. Use bridging loans to pay your taxes.
A bridging loan can be used to take your mortgage out of arrears and stop the home from being repossessed in the process.
Our quick and easy bridging loan calculator can be used to easily identify repayments on a bridging loan with just a few clicks.
Bridging loans have risen to the forefront over the last 15 years, offering a dynamic solution to expedite buying a house.
Small Business loans come in a variety of formats and are tailored to specific sorts of enterprises and their needs. Contact us for help.
Business Address: Office Block 2, Kibworth Business Park, Kibworth Harcourt, Leicestershire, LE8 0EX
Telephone: 0116 366 6338
Email: contact@ukbridgingloans.uk
