KIS Bridging Loans
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Bridging Loan Uses

There are many advantages of bridging loans when compared to other types of finance. When finance is only required for a short period of time, they often provide the cheapest option for raising the required funds. In addition they are fast to arrange, have flexible lending criteria so that approvals can be given quickly without extensive checks, and they can be secured on all types of property, including property that is unsuitable to other lenders.

What can bridging loans be used for?

Bridging loans can be used for a variety of different reasons

Maintaining a place in a sale chain

When a property purchase is being funded from the proceeds of the sale of another property, but the sale cannot be completed before or at the same time as the purchase, short term finance maybe required in order to buy before you sell, or bridge the gap, so that the purchase can still proceed. The bridge is just until the sale has been completed, upon which the proceeds of the sale are used to repay the bridge. This is a very traditional use of bridging loans and quite often thought to be the only reason for using one. However there are many other uses!

Incomplete Property Loans and Refurbishment Finance - Renovating, converting or restoring properties

Very often property is considered to be unsuitable for mortgage purposes. This is usually due to it being in a poor condition, or in the case of residential property and buy to let mortgages it may be just because the property lacks a kitchen or bathroom. Bridging finance can be secured against property that other lenders consider to be unsuitable. This is very useful for property developers and landlords who want to buy a property to restore and then sell, or refinance with a buy to let mortgage, keeping it to rent out.

Refurbishment finance will be categorised as either light or heavy refurbishment. Light refurbishment will cover non-structural works such as installing a new bathroom or kitchen, whilst heavy refurbishment will cover structural works such as building an extension or the removal of retaining walls.

What work is permitted under a light refurbishment loan?

  • Replacing doors or windows
  • Installing a new bathroom or kitchen
  • Heating and boiler system upgrades
  • External cosmetic renovations such as landscaping

What work is permitted under a heavy refurbishment loan?

  • Property conversions and extensions
  • Structural changes such as altering the property layout
  • Any works that require permitted development or planning permission
  • Basement and loft conversions
  • Works to facilitate a change of use of the property


We are experts at arranging new bridging facilities to replace existing loans that have gone over or are approaching the end of their term. Facilities can be arranged to replace existing facilities with a cheaper alternative, to extend a loan term and/or to release more funds. Going over term on a bridging loan usually means something has gone wrong and can also prove to be very expensive. Read more about Re-bridging an existing bridging loan.

Residential bridging - downsizing and upsizing finance for UK and foreign property purchase

Many of our customers approach us for bridging finance after finding a property they are keen to purchase without having to wait for someone to buy a property they already own. This is often known as buy before your sell bridging finance, and basically means they can get on with their plans, and can repay the borrowing when the sale eventually takes place.

Buying a property at auction

After making a winning bid at auction typically a 10% deposit is paid that day, and the rest of the agreed purchase price is required within 28 days. This period can sometimes be even sooner! Please see our property auction guide for further information about buying and financing properties at auction. Bridging loans are used to buy properties at auction because they can be set up quickly ensuring that purchases can complete within the required time frame.

For quick purchases when a bargain property or other must have item comes along

Often in order to secure the acquisition of an absolute bargain, the purchase would need to be completed quickly. Funds may not be available to enable the purchase as capital is often tied up in property or some other asset. A bridging loan can be arranged quickly, secured against the available equity in property. The bargain item can then be sold for a quick profit and the bridging loan repaid, or the item maybe kept and a more suitable longer term finance option can be arranged to repay the bridge.

Solve business short term cash flow problems

Cash flow problems can arise for a number of reasons when running a business. For example a bank may call in an overdraft facility, customers may be late paying their invoices, seasonal factors or new equipment may be unexpectedly required.

Business Ventures

The funds can be used to start any new business venture, as long as you have a reliable exit route planned to repay the loan.

Inheritance tax and probate issues

Sometimes funds are required when dealing with inheritance and probate issues. There are many reasons including having to release charges on property, pay tax and other bills, and also to pay off other beneficiaries.

Buying property below market value

Many bridging lenders will lend against the open market value of a property and not the purchase price. This is useful when buying property that is selling for a price below its market value, for some genuine reason!

Repossession prevention

If a property is due to be repossessed a bridging loan can be used to pay off the debt and prevent the repossession. This then enables an owner to retain control of the property so that they can sell it on their terms and avoid a forced sale situation.

Property development including change of use of a property

Bridging loans can be used to raise the funds required to finance property developments.

Buying a property with a short lease

Buying a property with a short term can be a problem for many mortgage companies, so a bridging loan can enable you to purchase the property and pay the costs involved with sorting the lease, so that you can get a traditional mortgage.

Paying a tax bill

Bridging loans can be arranged quickly, so could be a way to pay a tax bill and avoid penalties.

Divorce settlements

Funds can be used to settle a divorce if there is a need for speed

What are the advantages of a bridging loan?

Fast to arrange

When a finance facility is required to raise a large sum of money this would normally be achieved through the use of a business loan, or a commercial, residential or but to let mortgage. These types of facilities can take weeks or even months to arrange. We can arrange fast bridging loans, meaning that funds can be in your bank account in as little as 48 hours.

Please use our bridging loan calculator for a detailed illustration of the different costs involved in taking out a bridging loan.

Flexible lending criteria

There are many different bridging loan providers who all have their own unique lending criteria. Generally bridging lenders are not concerned with income, affordability and credit history. They do however want to know about the value of the property being offered as security and also the exit route. This is the method by which the bridging loan is going to be repaid before or at the end of the term.

All types of property can be used as security

A bridging loan can be secured against houses, flats, maisonettes, shops, mixed use properties, commercial units, offices, care homes, leisure complexes, farms, land, building plots, development land. Property can be freehold or leasehold even when the leasehold only has a short time left to run.

You can even use property that is listed for sale - which would not be acceptable to other lenders.

Property that is in a poor state of repair

Property being offered as security can be in poor condition, derelict or in need of major restoration. Bridging loans are often used to raise funds when the security property is unacceptable to a mortgage provider.

Non standard property construction

Many mortgage providers will only lend against property that is classed as standard construction. Bridging loans can be secured against property that are of a non standard or unusual construction.

Multiple properties can be used as security

One bridging finance facility can make use of one or more properties as security. This can be on a first or second charge basis, or a combination of both! For example in order to buy a property the full purchase price may need to be raised. Therefore a bridging loan could be set up making use of a first charge on the property to be purchased plus a second charge on another property that already has a mortgage on it, but has equity available.

Any purpose loans

Traditional lenders tend to only allow borrowing for limited purposes and there often isn't any flexibility. Bridging lenders do not mind what you intend to use the money for, as long as you can prove that you can pay it back.

Can put you in a stronger position to negotiate a property purchase

Receiving an offer from a cash buyer is more attractive to a seller than from someone who needs to sell their property first. You could also use this to negotiate a better price.

What are the disadvantages of a bridging loan?

Bridging loans are only intended as a short term finance option.

Their monthly rate of interest is high when compared to other methods of finance, so should not be used as a long term option. It is essential to have an exit strategy because at the end of the agreed term the bridging loan will need to be repaid.