Bridging finance is more than a short-term fix

Bridging finance is more than a short-term fix

You may have noticed that the bridging sector is performing quite well at the moment.

The latest data from the Association of Short Term Lenders (ASTL) shows that annual completions are up by a significant 30%.

Short-term lenders talk a lot about how bridging is finally crossing into the mainstream, and I really think we’re approaching that point. 

With the ASTL recently celebrating its 10th anniversary, it’s high time that the dialogue around bridging finance moved away from this idea that it’s all about the short term. 

Granted, a bridging loan is, by definition, short term. Someone borrows an amount of money and, typically, pays it back within a couple of months. That’s pretty short. 

But it’s more about how bridging finance is proving a buoyant part of our economy – especially against a backdrop of economic instability.

Brexit looms large. The high street is in deep trouble. The property market in flux. UK economic growth forecasts have been lowered. 

But amid all this sits the bridging sector, which is doing just fine, thank you. Strong performances from ASTL members (annual completions are now close to £3.8bn) sees the sector emerge as a growing, buoyant, even dynamic lending channel that’s working hard to support borrowers.

And it’s borrowers of all shapes and sizes, too. 

Another slightly skewed narrative around bridging is that it only helps complete property chains. It’s much more versatile than that. A hefty chunk of bridging finance is now devoted to development projects – so bridging is playing a key role in supporting SME housebuilders and developers.

It can also be used for a host of other reasons: releasing equity from residential assets, for self-builds, buying land etc. Bridging finance is very much a three-dimensional lending product that suits a range of loan types and sizes.

For brokers yet to add bridging to their product suite, I’d urge them to do so. Specialist lenders are becoming mainstream and – while the world seems a little topsy-turvy – bridging is strong and stable. 

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