That has been the common reaction from bridging lenders after Bridging Trends data revealed that the average completion time for bridging loans in Q1 2017 had increased to 50 days.

In Q1 2015, the average bridging completion time was marked at just 34 days.

The rise in completion time has been put down to a number of reasons, ranging from the rise in regulated bridging activity to events out of lenders and brokers control. 

Usually perceived as a quick form of finance, the Bridging Trends data has called into question whether a loan which takes 50 days to complete can be called a bridging loan.

“Bridging loans are still viable if they take a bit longer, but the perception of brokers and customers is that they are quick to fund when a landlord or developer needs to complete on a property quickly or have funds available for a fast renovation,” explained Scott Marshall, managing director of Roma Finance. 

Meanwhile, Michael Strange, managing director of Funding 365, admitted he was “very surprised” that the average time to complete a bridging loan was now 50 days.

Jonathan Sealey, CEO of Hope Capital, added: “I do not think that the time to complete a bridging loan is increasing across the board.

“We at Hope Capital have certainly seen no increase in completion time and do the same level of detailed due diligence that we have always done.”

‘Bridging has always been about more than just speed’

Jo Breeden, managing director of Crystal Specialist Finance, explained that it has been involved in cases this year which have been completed in six days, while some have taken as long as 91.

“Bridging has always been about more than just speed – it’s an outcome-focused transaction.

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“If the client wants speed alone, then a specialist knows which lenders can and do deliver on that front. 

“If the client is rate focused, then there needs to be an understanding that the timeframe may be compromised.”

Matthew Tooth, chief commercial officer at LendInvest, added that the length of time a loan takes to complete should not change the nature of a loan.

“If it meets a financing requirement at a point in time where more mainstream financing options do not exist, it is a bridging loan – even if it takes 50 days. 

“In more supportive market conditions we can expect the time taken to complete bridging loans to start coming down again.”

Jonathan added that it was the length of time that the loan is over which dictates whether it is a bridging loan or not. 

“Not all bridging loans need to be completed in a matter of days or even weeks in some cases. 

“For a number of reasons there may be times when a competent borrower will have a bridging loan application with a lender that may not require completion for a couple of months.”

50 days still much faster than bank loans

“Given the glacial pace that clearing banks operate, 50 days is still much faster than that, so it could be argued that it is [still bridging] – besides, what makes a bridging loan is not purely dictated by the time to complete (there are other factors why a borrower isn’t going to a clearing bank),” added Michael Dean, principal at Avamore Capital. 

Michael also explained that some bridging loans which involve aspects of development or refurbishment can take longer to complete because the borrower needs to put their professional team together as well as having the monitoring surveyor prepare their initial monitoring reports.

“We have also argued at the last ASTL [Association of Short Term Lenders] meeting that the term ‘bridging’ may be a misnomer for a lot of the activities that ASTL members engage in (particularly those of us who are more active in development and refurbishments). 

“We prefer the term ‘alternative finance’, which is probably more accurate for many of us.”

As lenders grow so do procedures 

Mike added that as lenders get larger, then by definition they have to rely on more rigorous processes, procedures and layers of committees. 

“All of this simply results in longer execution timeframes.  

“At Funding 365, we are a small and nimble organisation specifically set up to offer rapid execution timeframes.  

“As the adage goes: in the jungle, the big don’t eat the small, it is the fast that eat the slow.”