Top Ten Tips for Successfully Completing a Bridging Loan Application
Since 2008, the bridging finance sector has moved away from non-status, purely asset based loans. Yes
the quality of the security is vitally important, but there are now many other considerations that the
broker and their clients have to take into consideration.
Below are my top ten tips for ensuring that a bridging loan application goes through smoothly and
Take a Look at Bridging loans
(1) Know your lender
Each bridging company tends to focus on different types of loans (first charge bridging loan, second
charge bridging loan etc) or favour a specific type of security. Some like big ticket commercial
properties, others FSA regulated smaller loans. Remember the lender's product guide often implies that
they lend against anything to anyone, rarely is this wholly accurate. Know the lender's sweet spot and
you are far more likely to get a positive outcome.
(2) Submit a one page summary document
No bridging company wants or expects a long winded deal summary but a single page document with
the keys points helps everyone. This summary should consist of the background to the deal, details of
the security available, reason for the bridge and the exit route. Not only does it provide the underwriter
with the key information in an easily readable format, but more importantly shows that the applicant
and their adviser have thought carefully through not just the reasons for the bridging loan but also the
(3) Get your information correct upfront
There is no worse way to start a case than for the underwriter to find out that important information
regarding the case is incorrect. It amazes me how often the most basic information is missing from the
application form. Yes, the sooner the application is in the sooner the work can start, but it is much more
sensible to take the extra twenty minutes to ensure all the required information is included.
(4) Accurate estimate of the valuation of the property
The applicant should have a good estimate of what their property is worth. When properties are down
valued by 20% or more it means that either the valuer is from a different planet, which does
occasionally happen, or more likely the applicant has submitted a grossly enhanced value on their
application form. This not only causes delays but often means that the credit committee will lose
confidence in the competence of the applicant.
(5) Identify problems upfront
Bridging finance is expensive and is used for a reason. Often the applicant tries to hide these reasons
and thinks that no-one will find out about their poor credit history or defective property. Almost always
these details surface during the underwriting process and if disclosed upfront could have been dealt
with then which would lead to a quicker and smoother underwriting process.
Take a Look at Bridging loan
(6) Pick a good solicitor
It must be one of the most false economies that exist. The applicant is spending thousands, sometimes
tens of thousands of pounds on a bridging loan, but try to save a few hundred pounds by instructing a
sub-standard solicitor who is not sufficiently experienced to deal with these types of transaction. The
saying that you "get what you pay for" is often true when you are deciding which firm of solicitors to
(7) Submit backing evidence to the valuer
Published by Russ Svatt
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