Bridging loans are short-term financial solutions designed to help borrowers quickly access funds, typically for property transactions or business opportunities. When you need these loans, time is of the essence.
The time it takes to secure a bridging loan varies, but it’s generally much faster than traditional mortgage processes. So how quickly can you get a bridging loan? Let’s find out.
Standard Timeframes for Bridging Loan Approval
The approval process for bridging loans is known for its relative speed compared to other forms of property finance. Typically, you can expect to receive an initial decision within 24 to 48 hours of submitting your application.
However, the time from application to receiving funds can vary considerably.
In straightforward cases, where all documentation is in order and the property valuation is uncomplicated, it’s possible to complete the entire process and receive funds within 7 to 14 days. More complex cases might take 2 to 4 weeks or longer.
From Application to Funds Release
Understanding the stages involved in securing a bridging loan can help set realistic expectations:
- Initial enquiry and assessment (1-2 days): The lender or broker reviews your basic information and provides an initial indication of terms.
- Full application and documentation (2-5 days): You submit a formal application along with required documents. The lender reviews these in detail.
- Property valuation (3-7 days): An independent surveyor assesses the property’s value.
- Legal work and searches (5-10 days): Solicitors conduct necessary legal checks and prepare loan documents.
- Final approval and funds release (1-2 days): Once all checks are complete, the lender gives final approval and releases the funds.
Each stage’s duration can vary based on the complexity of your case and the efficiency of all parties involved.
Key Elements Influencing Bridging Loan Timelines
Several factors can impact how quickly you can secure a bridging loan.
Property-Related Factors
The type and condition of the property play a significant role in the loan’s timeline. Residential properties in good condition typically allow for faster processing compared to commercial properties or those requiring extensive renovation.
Valuation speed is another critical factor. Properties in popular areas with many comparable sales might be valued more quickly than unique or rural properties, where finding suitable comparisons can be challenging.
If you’re borrowing 70% or less, many lenders will use an automated or desktop valuation, where a physical inspection is not required.
Borrower-Related Factors
Your financial situation and preparedness can significantly influence the speed of your application. A strong credit history can lead to quicker decisions, while adverse credit might require additional checks, potentially slowing the process.
Having all necessary documentation ready – such as proof of income, bank statements, and details of your repayment plan – can dramatically speed up the application process. Lenders appreciate borrowers who are well-prepared and responsive to information requests.
Loan-Specific Elements
The complexity of your loan request affects processing time. Straightforward first charge loans on standard residential properties are often processed more quickly than second charge loans or those involving complex security arrangements.
Larger loan amounts typically require more thorough due diligence, which can extend timelines. Similarly, loans for unconventional purposes might need additional scrutiny, potentially leading to longer processing times.
Tips to Speed Up Your Bridging Loan Application
While much of the bridging loan timeline depends on lenders and third parties, there are steps you can take to help speed up the process.
Preparation is Key
Being well-prepared can significantly reduce delays:
- Gather all necessary documents before applying. This includes proof of ID, address history, bank statements, and details of the property you’re using as security.
- Have a clear, viable repayment plan. Lenders need to understand how you plan to repay the loan, whether through property sale, refinancing, or other means.
- If you’re purchasing a property, have a solicitor lined up and ready to act quickly.
Choosing the Right Lender or Broker
Working with experienced professionals will make a substantial difference:
- Specialist bridging loan brokers have extensive market knowledge and relationships with multiple lenders. They can quickly identify the most suitable lenders for your situation, potentially saving valuable time.
- Brokers can help you prepare your application to meet lender requirements, reducing the likelihood of delays due to incomplete or incorrect information.
- They can also manage the application process, chasing up valuations, solicitors, and lenders to keep things moving swiftly.
Common Scenarios for Fast Bridging Loans
Fast bridging loans are needed for time-critical situations.
Here are some common scenarios where the speed of bridging finance proves invaluable:
Auction property purchases often require completion within 28 days. Auction bridging loans can be arranged within this timeframe, allowing buyers to seize opportunities at auction that might be impossible with traditional mortgage finance.
Preventing property chain breakdowns is another common use. If a buyer in a property chain has a last-minute problem with their mortgage, a bridging loan can quickly provide the necessary funds to keep the chain intact and allow all transactions to complete.
Urgent business opportunities sometimes require quick access to substantial funds. Whether it’s acquiring stock at a discount, purchasing business premises, or funding a time-sensitive expansion, commercial bridging loans can provide the necessary capital when traditional business loans might be too slow to arrange.
Read more: What can a bridging loan be used for?
Bridging loans offer a remarkably quick financing solution, with funds potentially available in as little as 7 to 14 days in straightforward cases.
However, it’s important to remember that while speed is often a priority, it shouldn’t come at the expense of proper checks and careful consideration of the terms and costs involved.
The exact timeline for your bridging loan will depend on various factors, including the property type, your financial situation, and the complexity of the loan. By being well-prepared, choosing the right lender or broker, and understanding the process, you can help ensure your bridging loan proceeds as swiftly as possible.
If you’re considering a bridging loan and want to explore your options or get personalised advice on how quickly you might be able to secure funding, don’t hesitate to contact our team of experienced brokers. We’re here to help you find the right solution for your unique circumstances.