Commercial Finance
Business Growth
Unregulated bridging finance is a short-term, property-backed loan which is designed to ‘bridge’ a gap in funding. A loan is unregulated if it is secured against a property that you have never, and will never reside in.
FACTS
Unregulatedbridgingfinance
Unregulated refers to the fact that the loan being taken does not fall under the protection of the Financial Conduct Authority (FCA).
This means that you when taking out an unregulated loan, you will have less protection in the event of something going wrong.
The FCA rules focus on treating customers fairly in both the advice given and how the account is handled once the loan is in force.
Funders will allow loans for almost any purpose; the most common unregulated bridging loan uses are:
Adding value to a property through property refurbishment
Purchasing a property quickly
Funding an auction purchase
Repaying development finance
Funding a property conversion
Adding value to a property before selling it
Bridging loans become regulated when they are secured against your home. Unregulated loans are those secured against any other property or land, or those to a limited company or other type of corporate borrower.
There are three main exceptions to these rules:
- Where you will occupy part of the property, the loan is unregulated if the part that you occupy is below 40% of the total internal area.
- If you don’t occupy the property, but ever have or you may in the future, the loan is still regulated, even though you don’t currently reside there.
- Finally, second charge loans for business purposes are unregulated, even if they’re secured against your own home
Key Features
When taking out a Bridging Loan it is important that you have your exit planned before the Loan comes to an end.
As well as a sourcing a Bridging Loan for you we can also help advise what longer term funding is available and the criteria that needs fulfilling to obtain that funding.
Loan to Value
Up to 75%
Charge Types
First or Second Legal Mortgages over Residential or Commercial Property
Term
1 to 3 Years
Completion Time
Typically within 1 month
