These loans come in incredibly useful when a client needs to move quickly should an opportunity arise to snap up a new property ahead of the crowd, and at a competitive price.

The importance of bridging loans is borne out by recent data from the Association of Short Term Lenders (ASTL).

Figures from the trade body show that in the final quarter of 2022, £8.6bn worth of applications were made, up by 9.1% on the previous quarter.

Loan books are now at record highs showing just how well utilised this form of specialist finance has become.

However, there may come a time when a bridging loan cannot do the job alone and a client instead needs to move to plan B by re-bridging.

Why investors may want to re-bridge

Refinancing a bridging loan — or re-bridging — can come in useful for borrowers who need to adapt their initial plan.

The client might have purchased an investment property which they want to refurbish before either flipping for a profit or renting out as a traditional BTL property.

The planned work has dragged on longer than expected and those delays will take the client past the loan term of the existing bridge loan.
This has been far from uncommon over the last few years, with the construction industry facing all sorts of delays when it comes to accessing the required labour or materials.

The project is still a smart one and will deliver a solid profit, it just hasn’t been concluded yet.

Or perhaps the cost of the work is coming to more than expected and the funds from the original bridging loan have all been spent, the client is still confident that the property can be sold on for a sizeable profit, but in order to conclude the works they need to borrow more.

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Then there are those investors for whom the work is concluded and the property is ready to go, but they have not yet managed to conclude a sale — or in some cases remortgage to a traditional BTL product — and so need a little more time.

These are just a few examples of when re-bridging may come in useful, but at the heart of all of them is the need to adjust and change course from the original plan.

The client is able to raise the funds to pay off the initial bridging loan on time, but still have the funds to hand needed to complete their project successfully.

Looking for the exit

A crucial element of any re-bridging application will of course be the exit plan, [which] needs to be clear and reliable.

With any bridging loan, the lender will want to have a clear idea of how the borrower aims to repay the finance on time, but this is only heightened when it comes to re-bridging.
After all they will be very keen to ensure that the client is not in the same boat — looking for refinance options — when the term of the loan is approaching.

Identifying the right re-bridge

The bridging loan market is a fast-moving one, by its very nature, and that can make it difficult for brokers to keep on top of the precise rates and criteria employed by lenders on their proposition, particularly if they only handle a couple of cases a year.

That’s why it can make a lot of sense to utilise a platform like Provide Finance, which can help brokers to pinpoint the products open to their clients, connecting directly with hundreds of lenders active in the specialist space.

There is a team of specialist experts on hand who can assist brokers as and when issues arise with a case, or if they have any questions about the products on offer.

Bridging loans and the specialist market generally are only likely to become more in demand in the years ahead as lenders continue to innovate in order to serve lending niches.

Utilising the right technology can ensure that brokers can help their clients pinpoint the right products, no matter how infrequently they may work in certain areas of the property finance sector.