A large bridging loan is a 1 to 36 month finance facility ranging in size from £1 million to £250 million that is secured against equity in property.
The maximum loan available varies according to different lenders criteria, but most importantly the value of the property being offered as security and the strength of the proposed ‘exit’ route. This is because obtaining a large bridging loan is similar to any other bridging, so is mainly dependant on the value of the security being offered and the viability of the ‘exit route’ or plan to repay the loan before the end of its term.
Smaller bridging loans may have a maximum loan term of 12 to 24 months, whereas larger loans may require longer terms up to 36 months to allow sufficient time to complete substantial works and allow enough time to sell or refinance.
All lenders have a maximum loan size, and it is common to see maximums ranging from £1 million up to £10 million. Bridging lenders who will lend over £10 million are more specialist and have a better understanding of these markets.
Large bridging loans can be used for a range of options including:
Our rates for large bridging loans currently start at 0.49% per month. Typical interest rates will range between 0.55% and 1.0%, 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.
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.
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.
Most lenders will offer bridging loans of up to 70% LTV, with some going as high as 80%. The maximum loan to value will 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.
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.
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.
Together Andre and Chris 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.
Andre has over 30 years’ experience in the financial services industry. Having commenced his career in banking, Andre went on to become a Director of Savills Private Finance (SPF) Private Clients, where he set up and then ran their bridging and specialist finance team.
He has won numerous industry awards and is highly experienced in the high end of bridging finance.
With over 20 years’ experience in the sector, Chris co-founded the specialist finance team a SPF and has vast experience in the field of development finance and commercial mortgages. He too has won a variety of industry awards in recognition of his expertise.
Lenders will want to know about your planned exit for a bridging loan, which could include:
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 are for 12 to 18 months but some lenders may go up to 36 months for larger bridging loans. Terms over 12 months are available on some unregulated bridging loans.
In theory £250 million, but the amount you can borrow will depend on your plans, your experience and 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 your loan will complete will depend on the complexity of the deal and how quickly a valuation can be arranged. However, a two-week turnaround may still be possible in many cases and our dedicated team will work hard to meet your required timescale.
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 the valuation being obtained.
Valuation - the property will be professionally valued and a report into its condition and market value will be issued. If work is required, an estimate to the cost of the work will also be provided.
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.
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.
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 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.
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.
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.Written By Holly Andrews
Last updated: 22 November 2023 | © KIS Bridging Loans 2020