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What is a large bridging loan?

A large bridging loan is a short term finance facility of more than £1 million, typically arranged over 1 to 36 months. At the upper end of the market, facilities can reach £250 million or more, although most large bridging loans are more commonly up to around £25 million.

The maximum loan available will vary depending on each lender’s criteria and, most importantly, the value and type of property, or combined value of multiple properties, that are being offered as security.

As with any bridging loan, a strong exit route is essential. With large bridging loans, lenders will examine the proposed exit particularly closely to ensure there is a clear and credible plan to repay the loan within the agreed term.

In simple terms, obtaining a large bridging loan is similar to obtaining any other bridging loan, as it mainly depends on the value of the security being offered and the viability of the exit route.

Smaller bridging loans may have maximum terms of between 12 and 24 months, whereas larger loans may sometimes require longer terms, up to 36 months, and in some cases up to 60 months. This is to allow sufficient time for substantial works to be completed and for the property to be sold or refinanced.

Looking for a large bridging loan? Experience matters

Although the bridging market has grown significantly, it remains a specialist area of finance. Truly large bridging loans are even more specialist.

Many lenders advertise maximum loan sizes up to £5 million, £10 million and above. However, this does not mean that they see these cases regularly, or that every large case fits their appetite. In practice, once a bridging loan reaches a certain level, often around £1 million, although this varies by lender, the underwriting process usually becomes far more detailed, selective and can even go through a very different process to what that lender uses for their regular sized loans.

“A lender’s maximum loan size on paper is not the same as having real appetite and experience for large bridging loans in practice.”

This is because a large bridging loan is rarely just a standard bridging case, with an extra zero added. Higher value transactions often involve more complex assets, more detailed due diligence, closer scrutiny of the exit route, and a more cautious approach to valuation risk. With prime and high-value property in particular, values can be more sensitive, and lender confidence can change quickly if the case is not packaged and presented correctly.

This is why experience matters so much.

There are thousands of brokers in the UK bridging sector, but relatively few of these regularly handle large bridging loans. Many brokers are highly capable at arranging standard bridging cases, but they may only come across a £1 million-plus enquiry occasionally. When this happens, borrowers can find themselves dealing with someone who is learning the process as they go.

With a large bridging loan, that can be a problem. The choice of lender is narrower, appetite varies more, and the way the application is structured and presented can have a major impact on the outcome.

If a case is taken to the wrong lenders, poorly packaged, or introduced before the key issues have been properly addressed, it can quickly lose momentum. Once several lenders have already reviewed and declined a case, it can become harder to place successfully elsewhere, even where the deal itself is perfectly good and should be fundable.

For these above reasons, borrowers seeking a large bridging loan should look for a broker who has genuine successful experience in arranging these types of loans.

An experienced large bridging loan broker will understand:

  • Which lenders are genuinely comfortable at higher loan sizes
  • Where real underwriting appetite sits, beyond headline criteria
  • How to present the strengths of the case clearly and credibly
  • How to address likely concerns before the lender raises them
  • How to structure the application to give it the best chance of success.

When the loan size is substantial, experience is not a luxury. It is a key part of getting the deal done properly.

At KIS, we understand that large bridging loans require an additional level of knowledge, lender access and case management. From the outset, our focus is on placing the case correctly, presenting it properly, and guiding it through the market in a way that protects momentum and gives you the strongest possible chance of success.

Uses of a large bridging loan

Large bridging loans can be used for a range of options including:

  • Property acquisition
  • Refinancing
  • Funding developments
  • Repaying property development finance
  • Hotel developments
  • Luxury apartments
  • Housing developments
  • Office complexes
  • Nursing/care homes
  • Leisure complexes
  • Factories and industrial units 

What rate of interest can I get on a large bridging loan?

Our rates for large bridging loans currently start at 0.49% per month. Typical interest rates will range between 0.53% and 0.89%, depending on the loan to value and the type of security being used for the loan.

Larger bridging loans usually attract a lower arrangement fee, in proportion to the loan, as well as lower interest rates.

For an illustration of the likely costs involved please see our bridging loan calculator section where you will find an easy to use calculator and quotation tool that provides instant results.

Key features

  • Interest rates – From 0.49% per month
  • Loan to value – Up to 80% of the value of the assets being offered as security
  • Term – 36 months is the usual maximum, months for non-regulated loans and 12 months for regulated loans. There are a few exceptions that could provide a maximum 60 months.
  • Interest structure – Roll-up, retained or serviced interest
  • First and Second Charge Options available

What other fees will I pay on a large bridging loan?

Broker fees – many brokers charge a fee for their services. At KIS finance we don’t charge a broker fee, regardless of the size of the bridging loan.

Lender arrangement fee – this is charged by the lender when they release the funds and is usually added to the loan. This may be lower for larger bridging loans and is typically around 0.25% to 2% of the loan facility.

Lender exit fee – some lenders will charge an exit fee, although this is very uncommon with our lenders.

Valuation fee – this fee is payable to a chartered surveyor appointed by the lender. Costs will vary depending on the value and type of property being provided as security for the loan. The lenders also us AVMs and Desktop valuations, some of these options do not have a charge.

Legal fees – you will need to pay both your own legal fees and the lender’s legal fees. The amount will depend on the size of the loan and the value of the property or properties being used as security. More and more lenders these days do offer a dual representation option, where you can use the lenders solicitors for both sides of the legal process.

What is the maximum loan to value on a large bridging loan?

Most lenders will offer large bridging loans of up to 70% LTV, with some going as high as 85%, but this is very unusual. Due to the size, it is more usual that a lender will reduce their maximum LTV as the loan size increases.

The maximum loan to value will also vary depending on the type of security being offered, the location and also the application or proposal as a whole.

Any lender is going to judge the risk of lending. If it is a project that they understand and are comfortable with, they are going to offer a higher loan to value than they would for a project they are not comfortable with or have little understanding of.

For unusual projects, it is even more important for us to select lenders who have experience and a good understanding of what the client’s plans are and what they are looking to achieve.

Who can apply for a large bridging loan?

  • Individuals
  • Limited companies
  • Partnerships
  • Pension funds
  • Offshore companies
  • Non-UK based individuals
  • Minimum age 18 with no set maximum age

Bridging loans in London and other high property value locations

If you are looking for bridging finance in areas with high property values, such as London, parts of Manchester, etc, then we can work with suitable lenders within these markets. Due to the high-end property market being less fluid, the range of lenders may be reduced, but our experienced team will be able to guide you through the best options available to meet your requirements.

Meet our dedicated specialist large loan team

Based in central London, our dedicated team of finance consultants specialise in sourcing and arranging the best possible deals, for both bridging and development finance facilities that are in excess of £1 million.

Most bridging lenders who provide loans of £100,000 are also happy to fund facilities over £1 million, many of them offering up to £5 million, with a few prepared to lend in excess of this.

However, there are specialist lenders who will not provide loan amounts that are less than £1 million. Many of these actually have minimum loan amounts ranging from £5 million to £20 million! It is therefore no surprise that these lenders are usually the most competitive in the marketplace when it comes to providing finance for sums in excess of £1 million.

Our dedicated large facilities team possess the required knowledge, experience and the necessary relationships to work closely with these specialist lenders.

This enables us to find and arrange the best possible short term finance facilities for large loan amounts ranging from £1 million up to £250 million.

Between them, our team have the sector knowledge and experience to guide you through the process of high-end finance and ensure that you access the best deals on offer to fit your individual circumstances.

What are acceptable exit strategies for a large bridging loan?

Lenders will want to know about your planned exit for a bridging loan, which could include:

  • Sale of the security property
  • Sale of another property
  • Sale of a business, shares or other investment
  • Refinance to a residential mortgage, commercial mortgage, buy to let mortgage or development finance.

What are the differences between large and small bridging loans?

Large bridging loans tend to be underwritten on a bespoke basis, with the lender often requiring more due diligence than for a smaller loan. An expert in high value bridging finance is essential to guide you through the process and ensure that you get the best deal available to fit your individual circumstances.

Typical terms range from 1 to 12 months, then there are facilities offering up to 24 months and even onto 60 months.

How much can I borrow?

In theory £250 million, but the amount you can borrow will depend on the total value of the property, your plans and your experience, then most importantly the strength of your exit strategy.  At KIS Finance we will guide you through the process to help you meet your requirements.

How quickly can a loan be arranged?

How quickly your loan will complete will depend on the complexity of the application and how quickly any required valuations can be arranged. A two-week or less turnaround may be possible in many cases, and our dedicated team will work hard to meet your required timescale.

How to apply for a large bridging loan

At KIS Finance we aim to keep the whole process as simple as possible, regardless of the size of the loan. The typical stages of the application process are:

An initial discussion with one of our specialist team - Who will explore your plans and requirements in detail with you.

Selecting a lender - Our team will then select which lender is best suited to your needs and experience, then will approach them to negotiate and obtain an initial offer. The offer at this stage will most likely be conditional on a suitable valuation being obtained.

Valuation - This could be in the form of an AVM (Automated Valuation Model) or a desktop valuation. However, if any physical valuations are required, these will detail the market value.

Formal offer - Once a valuation report has been signed off by the lender, they will issue a formal offer.

Legals - The required legal work will then be completed by your solicitor.

Funds are released - Once all the legals are completed, the funds will be released, usually to your solicitor.

Do the FCA regulate large bridging Loans?

If a bridging loan is secured on a property that either you or a family member have ever, or will ever live in, then it is classed as a regulated loan by the FCA.

Large Bridging Loan Case Studies

A large bridging restoration project

Restoration of 2 properties and repaying existing £2.7 million bridging facility

The client came to us for help when their current large bridging facility had gone two months over term and their existing lender was charging them an extortionate rate of interest due to the default.  The loan had been secured on two valuable properties in London, one of which they lived in and the other which had been derelict for many years, and they planned to renovate. Both properties also had mortgages secured on them too.

The original bridge was taken out 14 months previously, with the plan to sell both properties once the works were completed so that they could then downsize and be mortgage free. Unfortunately the client had vastly underestimate the costs of the renovations and had run out of money without completing either property. Their current lender that they were with, refused to extend the terms of their loan leaving them desperate to find a solution to their predicament.

We were able to arrange a new bridging facility to clear the existing loan and release additional funds to enable the works to be completed.  This was arranged on the basis of retained interest for 12 months, along with a facility to draw down funds at the various stages of works to maximise the loan to value and keep the interest charges as low as possible.

The works were completed within 8 months and the bridging facility was repaid with the sale of the larger of the 2 properties.

A large property development site

A £6.8 million facility secured against a large development site

A 6.8 million large bridging loan was required to repay a development finance facility that was about to default.

Our specialist large bridging team moved quickly to refinance the development loan with twelve month bridging facility.

The new bridging loan was at a significantly cheaper rate than the development finance, so straight away saved the developer money, and also released a further £400,000 required to finish some works and provide cash flow.

Everything rested on a large bridging loan that had to be in place in 28 days

We were contacted by a client who had wound up with a debt of £27 million which he needed to repay within 1 month.

The debt arose from a business arrangement that changed over time and ended up needing to be exited quickly, otherwise they could have lost everything they had built up for themselves and family throughout their working life.

The client was consequently under a lot of pressure, but we quickly put a plan in place to arrange the required funds quickly. Client was able to put in £5 million within the timescale, we had to raise the remaining £22 million.

Valuations were expedited and carried out on a large number of assets, some of which were unusual. We worked with the surveyors to obtain quick and easy access to the properties, many of which were tenanted. We then chased each valuation report diligently to ensure that they were all  written up and back with the lender quickly. We also worked closely with the lender’s and client’s solicotor’s to ensure that all questions were dealt with and there were no unnecessary delays.

There were a number of hiccups along the way, but everything was sorted out in time and funds were ready with a few days to spare, which was very much to the delight of our client.  

A 3 day bridging loan project

3 day completion on £1 million bridging facility

With only 3 working days to help an applicant replace their existing £1million bridging facility that was due to end, we had to work fast.

The client had been renovating a property in London, and with the works completed he had a sale agreed. However, at the last minute the sale fell through leaving him at risk of going over his original bridge term.  This would have cost him almost £70,000 as the terms of the expensive loan agreement he currently had in place, included a 6% penalty if he didn’t redeem the bridge on time.

Unfortunately, we couldn’t use an automated, desktop or drive by valuation as substantial works had been done to the property since its purchase and its value had greatly increased. Using our contacts we were able to arrange a valuation for the next day with a surveyor who was approved by our chosen lender.

Simultaneously we arranged for the loan offer to be issued, which the client took to their solicitors the next day, which was a Friday.  By the Monday morning the valuation was back, and the loan completed by 2pm that day.

For further information please contact us anytime and we will be happy to provide any details that you require.