Bridging Finance – Regulated vs Non-Regulated Loans
A bridging loan can be a uniquely flexible and cost-effective borrowing solution for covering urgent costs and funding time-critical investment opportunities. Bridging finance can be issued up to around 85% LTV, secured against almost any type of property and used for most legal purposes.
With all the paperwork in place, a bridging loan can be arranged in as little as a few working days. Repayable over a maximum term of 12 to 18 months, bridging finance is typically charged at a rate of 0.5% per month.
All bridging loan agreements are tailored to suit the unique requirements of the borrower, with a broad range of regulated and non-regulated products available.
Your broker will help determine which of the two best suits your needs, while negotiating on your behalf to ensure you get an unbeatable deal from a top-rated lender.
Regulated Bridging Finance
A regulated bridging loan is issued when the applicant’s asset (security) for the facility is either currently used or intended to be used as a residential home by the borrower or a member of their family.
Regulated bridging loans can be used for majority of legal purposes, though cannot be issued in the form of a second charge loan with commercial applications in mind.
This could be a useful facility for eligible borrowers who are looking to:
- Buy a home or a commercial property at auction
- Extend their buy-to-let property portfolio
- Conduct renovations or improvements on a property they own
- Raise capital for business purposes
- Escape the property chain when relocating
Typical features of a regulated bridging loan include:
- Available from £50,000 with no upper limit
- Can be secured against any type of property
- Fast completions (often a few working days)
- Flexible loan terms of 1 to 18 months
- Competitive monthly interest and low borrowing costs
Non-Regulated Bridging Finance
Non-regulated bridging finance is issued when the security for the loan is not a property that the borrower or a member of their family resides in or intends to move into as their main home.
Non-regulated bridging finance can be used for almost any legal purpose and is not subject to the same restrictions regarding second-charge loans being used for business or commercial applications.
This makes non-regulated bridging finance a useful option for commercial customers, business borrowers and established investors, who may be looking to expand an established property portfolio.
The basic features of non-regulated bridging finance are similar to those of regulated bridging finance, though often with greater flexibility regarding the types of assets that can be used as security for the loan.