Choosing the Right Bridging Loan: A No-Nonsense Guide for Property Developers
Choosing the Right Bridging Loan: A No-Nonsense Guide for Property Developers
We love the ins and outs of bridging finance. Loan structures, term sheets, lender appetite shifts… itโs our idea of a good time (!)
But we understand that not everyone shares our enthusiasm.
If you just want to get your deal done, avoid the delays, and not drown in paperwork then this guide is for you. It breaks down what matters, what doesnโt, and how to avoid common pitfalls (spoiler: donโt go direct unless you really enjoy chasing underwriters).
Start with the why: Whatโs the loan actually for?
Before lenders ask you, ask yourself:
- Are you buying at auction?
- Refurbishing a property?
- Bridging the gap until a refinance or sale?
The clearer your goal, the quicker we can match you with the right lender development finance lender.. Borrow only what you need โ no more, no less.
Tapton tip: If your planโs still a bit scribbled-on-a-napkin, weโll help turn it into something a lender wants to see which is clear, credible, and confidence-boosting. Because when a lender believes in the plan, theyโre far more likely to back it.
Understand your exit โ or donโt bother applying
Bridging Lenders donโt want to be your long-term partner, think of them more like Leonardo DiCaprio. Theyโre interested for a while, but only if youโve got a clear plan and know exactly when itโs going to end.They want to know how and when theyโre getting paid back.
Common exit strategies include:
Selling the property
Refinancing onto a longer-term product
Releasing equity from another asset
If your exit is โweโll figure it out later,โ itโs time for a rethink โ and a chat with us.
Pick the right type of bridging loan
Yes, there are different types. No, theyโre not all created equal.
Closed bridging loans
Best when youโve got a fixed exit, like a sale date or refinance already agreed. Cheaper, tidier, and more appealing to lenders.
Open bridging loans
No fixed end date. More flexibility, but also more questions from the lender and slightly higher pricing.
Tapton insight: We know which products lenders are favouring right now โ because weโre talking to them daily.
Compare terms โ but donโt just chase the lowest rate
The biggest mistake developers make going direct? Obsessing over the interest rate and ignoring the real cost.
Hereโs what actually matters when choosing a property development loan:
- Total cost of the loan, including arrangement fees, legal fees, valuation, and exit fees
- Loan-to-value (LTV) โ usually up to 75โ80%, but we often structure deals that push those limits
- Repayment terms โ can you repay early without being penalised?
Why Tapton? We donโt just find you a lender. We find the right lender โ one that gets your deal, shares your urgency, and offers terms that work.
Want to see this in action? Check out our latest case studies on deals we’ve funded.
- Total cost of the loan, including arrangement fees, legal fees, valuation, and exit fees
Case Study Spotlight: ยฃ2.2m Land Bridge, Completed in 12 Days
The challenge
Our client needed a fast turnaround to secure a prime parcel of land, but didnโt yet have planning in place. Most lenders saw it as too speculative, or required planning consent before funding.
The solution
We structured a ยฃ2.2m first charge bridging loan at 63% loan-to-value, secured purely against the landโs existing market value without planning permission in place.
Why it worked
- We knew which lenders were open to land deals on strong sites without planning.
- The Tapton team packaged the deal cleanly with a credible future-use case.
- We moved fast and completed in just 12 working days, from enquiry to funds released
The result
The client secured the site, and weโre now working with them on a development exit once planning is granted.
Deals like this donโt get done on comparison sites. It takes real relationships and deal experience.
Ask the right questions (Or Let Us Ask For You)
If you’re going direct, youโll need to ask:
- Whatโs the full cost of the loan, including all hidden extras?
- How long will approval and drawdown take?
- Can I extend the term if things shift?
- Are there any early repayment charges?
Or save yourself the hassle, weโll ask the awkward questions and get you straight answers.
For more guidance, explore our bridging finance service.
Final thoughts: why use a broker?
If youโre a developer and youโre not keen on:
- Spending weeks chasing the wrong people
- Getting rejected for avoidable reasons
- Missing out on great sites because funding didnโt land in time
Then it might be time to think about using a broker. With Tapton you get:
- Access to 400+ active lenders
- A team that knows how to present your deal, properly
- Fast, no-nonsense support
- A partner whoโs with you from first enquiry to final drawdown
Ready to Secure the Right Bridging Finance?
If you want to move quickly, borrow smart, and work with someone who genuinely enjoys doing the heavy lifting then youโre in the right place.
Get in touch with our team or learn more about who we are and why developers trust Tapton.
Call us on 0203 556 8657 or email info@taptoncapital.co.uk and letโs get your next project funded.
FAQ
FAQ: Bridging Loans for Developers
A bridging loan is short-term finance that helps you “bridge the gap” between buying and selling, or while waiting for longer-term finance to be arranged. It’s commonly used by property developers and investors
There are two main types:
Closed bridging loan: Has a fixed exit strategy already in place (e.g. a set sale date)
Open bridging loan: No fixed exit, but a plan is in place. Offers more flexibility, but usually costs more
Some lenders can fund in 5โ10 working days, but average timelines are 2โ3 weeks. At Tapton, weโve completed in as little as 12 working days for complex deals.
What can bridging finance be used for?
- Buying property at auction
- Refurbishing or flipping property
- Securing land (with or without planning)
- Bridging to refinance
- Avoiding a property chain collapse
Most lenders will offer up to 75%โ80% LTV on residential property. For land or commercial deals, the LTV might be lower depending on risk.
You can go direct but it often leads to delays, rejections, or deals falling apart due to poor packaging. Brokers like Tapton know which lenders to approach, how to present your deal, and how to secure the best terms quickly.
