How quickly can I get a bridging loan?

How quickly can I get a bridging loan?

Bridging loans can be arranged quickly – But what are the pitfalls?

Fast bridging loans are an attractive option for those who need quick access to funds. If you’re wondering, “How quickly can I get a bridging loan?” the answer can vary depending on several factors, including the complexity of the application, the lender, and how quickly you can provide the necessary documentation. Typically, you can expect to receive funds within 3 to 4 weeks if all parties work together quickly and efficiently. However,  some lenders can process applications much faster.  

Bridging loans are often used in situations where timing is critical – like purchasing a property at auction or covering a temporary cash shortfall before long-term financing is secured. Understanding the process and what can impact the timeline will help you prepare and expedite the process.

Factors Affecting the Speed of a Bridging Loan

Lender Type and Processing Time

Different lenders have different processing times. Specialist lenders who focus on bridging finance often have more streamlined processes compared to traditional banks. For example, private lenders or bridging finance specialists may be able to process applications in as little as 5 to 7 days.  Occasionally, bridging loans can be completed even quicker, in some cases within 48 to 72 hours, however, this is the exception rather than the rule. On the other hand, if you apply through a bank or a traditional lender, the process could take far longer.

Application and Documentation

The quicker you provide complete and accurate documentation, the faster the lender can process your application. Typically, you will need:

• Proof of income or affordability (in some cases, not needed for certain types of bridging loans)
• Evidence of the value of the property you’re using as security
• Identification and proof of residence
• Details of the exit strategy, such as a property sale or long-term financing arrangement

Some lenders may offer pre-approved bridging loans, where much of the documentation has already been assessed, which can speed up the process considerably.

Property Valuation

A crucial step in the bridging loan approval process is the valuation of the property being used as security. This can be established to the lender’s satisfaction in a number of ways.

• A desktop valuation. This can be done very quickly and relies on databases, recent sales and your property being of a fairly standard nature.  Where the bridging loan is at a low loan-to-value, lenders will consider using a desktop valuation.  It is very fast and cheap compared to a full valuation. Typically lenders will lend up to 60% or 65% loan to value and may cap the loan size because of the increased risk 
• A drive-by valuation. In some cases, lenders will accept a valuation without the valuer going inside the property. This is also normally faster and cheaper than a full valuation
• Valuation and internal inspection. This can take between 2 to 7 days  for the valuer to inspect the property and sometimes a further week to write and submit the report, 
• As a simple rule, a lower loan to value and a smaller loan presents less risk to the lender.  Consequently, they are more likely to accept a desktop valuation or a drive-by valuation which saves time and cost.

Legal Work

Legal processes, such as title checks and ensuring there are no legal disputes over the property, can take time. Some solicitors who specialise in bridging loans can fast-track this process. Engage a solicitor experienced in bridging loans to streamline the legal process. However, if issues arise, such as property title disputes, incorrect planning consent for the proposed use, absence of necessary reports etc, it can extend the timeline by several days or weeks.

Credit History

Complicated credit history or financial issues can slightly slow the process, but this is typically a minor factor since bridging loans are secured against property, not primarily based on credit. However, court judgments or defaults on debt repayment may require resolution before loan completion. Discuss these concerns with your broker early to ensure you approach a lender suited to your situation if clearing the debt isn’t possible.

Steps to Speed Up Your Bridging Loan Application

Choose a Specialist Lender

Opting for a lender who specialises in bridging finance can save you valuable time. These lenders often have dedicated processes for quick decisions in principle, the application process, final approval., 

Prepare Your Documentation

Ensuring that you have all the necessary documents ready in advance is crucial. This includes:

• A fully completed application form
• Proof of identity
• Evidence of your exit strategy (e.g., a property sale agreement or a mortgage offer)
• Access to a solicitor who is a bridging expert and will act quickly
• If an auction purchase, obtain the full legal pack and send it to your solicitor and broker at the earliest possible opportunity

Pre-arrange a Property Valuation

Complete the property valuation promptly to significantly reduce potential delays. In some cases, lenders will accept desktop valuations, which are faster than on-site inspections.

Use an Experienced Solicitor

A solicitor who is familiar with bridging loans can speed up the legal process, which is often a bottleneck. Lenders even offer a panel of solicitors to choose from, ensuring a faster turnaround. Sometimes, the lender permits one solicitor to represent both the borrower and the lender, a practice called Dual Representation. This approach often streamlines the legal process, enabling faster arrangements of bridging loans. The potential downside of dual representation is that the solicitor acting for you at the dual representation firm may be less experienced. Dealing with a specific solicitor, rather than a team, can be beneficial when solving problems when deadlines are tight or cutting through red tape. 

Refurbishment bridging

If you’re planning to carry out significant work on the property and need to borrow money to complete the work, this adds an extra layer of complication. Lenders will want to see that you have a clear exit to repay the loan and therefore have the capability and the funding to carry out the proposed works. Show the lender a detailed schedule of your intended work and its associated costs to streamline approval. They will ask their surveyor to comment if these costs are reasonable. Also be ready to evidence you have the skills and experience, or the right team around you, to carry out the work you are proposing.

Clear Communication

Regularly communicate with your lender, broker, and solicitor to promptly address any queries or additional requirements. Any delays in responding to requests for information can add days to the process.

Take calculated risks when necessary to expedite the process.

If speed is your priority, you can potentially start an application, instruct the valuation and instruct solicitors at the outset. However, if any of these three parts of the process fail, you may have saved time but wasted money. When you have instructed the solicitors and then get a bad valuation which prevents you from proceeding you will still have to pay the solicitors fees for the work they have done so far.

What to Expect After Approval 

Complications with legal work or valuations can delay completion by several days or longer, depending on how quickly issues are resolved. Once underwriting, legal matters, and valuations are approved, the lender can issue a formal offer. Funds are often released the same day, within hours of signing all required documents. Ensure you have a clear exit strategy, as lenders prioritise confidence in timely loan repayment.

Conclusion

You can often secure a bridging loan within 5 to 14 days, depending on the lender, application complexity, and how quickly you submit the required documentation. With thorough preparation and a specialist lender, you might access funds even faster, sometimes in just 48 to 72 hours.

Unexpected delays are common at the valuation or legal stage which can easily turn days into weeks. 

It’s always a good idea to speak to a financial adviser or a specialist broker before applying for a bridging loan to ensure that the product suits your needs and that you have all the information needed to expedite the process.

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