Whether you’re a developer, a landlord looking to expand their portfolio, or a first-time buyer looking to secure a property, you need capital in order to make a property or land purchase.
Depending on how you are looking to purchase a property, be it through auction or directly from a seller, you may need to act quickly and if you already own a property that is waiting to sell, or you simply lack the necessary funds for the purchase, a loan may be needed.
With typical loans and mortgages often taking months to receive, many turn to bridging loans as a means of securing quick finance. Though more flexible than typical loans, bridging loans do have an eligibility criteria that must be met before an individual can receive a loan.
At Bridging Finance Solutions, we have helped countless individuals get the finance they need, and in this guide, we will give more details about the bridging loan eligibility criteria in 2026.
What is a Bridging Loan?
A bridging loan is a short-term financing option for purchasers who wish to ‘bridge the gap’ when purchasing a property before selling another or when quick funds are needed for a property purchase.
Bridging loans are often chosen as alternatives to traditional mortgages because they can be arranged swiftly and involve a shorter commitment period. Typically, the repayment deadline for a bridging loan taken out by clients is 12 months or less.
Bridging loans provide a great solution for anyone in need of quick finance to develop a property, buy at auction or purchase a residential property.
Key Eligibility Criteria
Before applying for a bridging loan, it is important to ensure that you meet the eligibility criteria, which include:
Exit Strategy
Before any lender even considers providing you with a loan, they need to know when and how you’ll be able to repay your loan, and so they will expect you to provide an exit strategy.
Because bridging loans are short-term loans, they are usually repaid within 12 months, and with a quick turnaround, the lender must have the confidence that you will be able to repay your loan within the set time frame.
Your exit strategy may be the sale of a property, undertaking a different loan or any other form of income, but you must be able to prove that you will be able to exit the loan in the agreed-upon time.
Property Type and Loan-to-Value Ratio
When you take out a bridging loan, it usually has the first charge on a property, meaning the loan is secured against the property, which is used as collateral. This is why it is essential for the lender to know the property type and value, as this helps them assess whether the loan is worth the perceived risk.
The property value will dictate how much you can borrow, and borrowers base their loan on a Loan-to-Value ratio, with the average lending being up to 70-75% of the property’s current or expected value (if the property is undergoing renovation).
If the borrower defaults on the loan, the lender has the right to seize the property to cover its loss. If the property is of low value, the lender may refuse the loan or offer a reduced amount or higher rates.
It is essential that you submit accurate data concerning the value of the property so that the lender can make an informed decision.
Borrower History
A borrower’s credit and reputation are important to lenders because they allow them to assess the risk of the loan. If a borrower has a history of loan defaults, the lender may either decline the loan outright or charge a higher interest rate.
Having a clean credit history may also lead to more favourable terms when applying for a bridging loan, and when matched with a solid exit strategy, the borrower is more likely to receive better interest rates. A poor credit history does not mean the loan will be refused and each application is assessed individually.
Who Can Apply for a Bridging Loan?
Bridging loans are growing in popularity due to how accessible they are to many individuals.
Those who can apply for a bridging loan include:
- Homeowners
- Property Investors
- Businesses looking to develop property
- Small property enterprises
- Companies and partnerships
Although these individuals may apply, there is no guarantee funds will be made available if they do not meet the required criteria.
What Could Disqualify You From a Bridging Loan?
You may be declined a loan for the following reasons:
Unviable Exit Strategy
As we have outlined above, exit plans are essential for all bridging loans, and if the exit strategy that you supply is unrealistic or unviable, the lenders will likely turn down the loan to avoid risk.
Unacceptable Property Type
Some lenders impose restrictions on the properties they are willing to finance, with many bridging loan lenders choosing not to lend on commercial properties, as they are often perceived as higher risk.
The type of property for which they are willing to provide a loan is at the lender’s discretion.
Application Errors
Submitting an accurate application is essential to securing a bridging loan. If you fail to provide the necessary documents or present unrealistic costs for the project, that can be incredibly off-putting for lenders.
One of the most appealing aspects of bridging loans is being able to secure a loan quickly, but if your application contains errors, then you’re unable to make the most of it. This is why it is so essential to triple-check your application before submitting it.
Make it Happen With Bridging Finance
With this guide, you should now have a better understanding of what is expected of you when applying for a bridging loan and the eligibility criteria you must meet to be accepted.
You must have a viable exit strategy, a strong development plan and accurate estimations for the cost of your project.
Do you meet the criteria, and are you looking for a quick cash injection? Find out how we can make it happen for you today. Get in touch with our team.
Whether you’re looking for fast property purchase finance, development finance, or capital release, our experienced team is ready to help you secure the funding you need.
