Bridging Finance Checklist

Submitting a complete and accurate application for your bridging loan will help you move from enquiry to approval in the shortest possible timescale. When time is of the essence a quick decision on your finance is exactly what you need.

Before you start

Let’s face it, form filling is never much fun at the best of times, but it’s made a whole lot easier if you’ve got the information you need at your fingertips. We’ve written this guide to help you do just that.

We recommend setting aside an hour or so to completing your application. Try to find a quiet place, free of distractions, so you can fully focus on the job at hand.  

You will need:

1. Contact information for everybody involved in the deal, including your solicitor
2. The amount you are looking to borrow
3. Details of the security and its valuation, both before and after development or refurbishment
4. Costs and timelines for any refurbishment or development activity
5. Planning permission(s), if applicable
6. Information about you and any other applicants and guarantors
7. Your repayment proposals

Let’s have a look at some of these in more detail:

Loan amount

The loan amount will naturally be the amount you are looking to borrow to purchase the property and carry out any necessary work on it. You can expect to be asked about completion dates, the source of your deposit, and for a full schedule of costs and timelines for any works that are to be completed.

Security

Potential lenders will request a lot of information about the property or properties in question. This will include the type of property (or properties) being bought and whether the purchase is for freehold or leasehold.

Of course, it’s the valuation that will be front of mind for the lender, so you will be asked for information and evidence about the existing valuation of the property (or properties), as well as the estimated gross development value (GDV) after completion of any works. 

You will also be asked whether planning permission is in place or not and, if so, what for. You’ll also be asked to provide details of any other loans secured on the same property and whether you’re planning to do anything to change its value (for example, to demolish it, obtain planning permission, carry out structural changes, or refurbish it).

About you

Reputable lenders will want to look beyond the value of the security and understand as much about you, the borrower, as they can.

They will require proof of identification, such as passports and bank account details, as well as details of any experience you have with property refurbishment or development. You might be asked for three months’ worth of personal bank statements too.

If you are using an existing or new limited company to run the project, you’ll be asked to provide information about the company and the shareholders.

Repayment

Your lender will want to know how you plan to pay back the bridging loan. Normally, this will be through the sale or refinancing of the property (or properties) in question. If interest is to be covered or capital repayments are to be made during the term of the loan, evidence of the source of funds to do this will be asked for.

What to do?

Having worked hard over your application, you don’t want to create avoidable delays with a simple omission or oversight. We’ll finish with a few of the most common, and most easily fixed mistakes:

• Do make sure all applicants and guarantors sign the application before you submit it
• Do ensure that all pages are completed and attached
• Do send in all the required documents. Approval will inevitably be delayed if any essential information is missing
• Don’t leave any parts of the application blank. If you’re not sure, or the information is to be provided at a later date, provide the information to the best of your knowledge and indicate that you will provide additional information when you are in a position to do so 
• Don’t exaggerate valuations or timelines in the hope they will make the application look stronger. These will be revealed during the approval process and could delay the decision and possibly lead to rejection.

We’re here to help

We hope this guide will help you prepare a successful bridging loan application as efficiently as possible. Every lender has its own specific criteria for bridging finance, so if you would like to have a confidential chat about how best to fund your next commercial property deal or to find out about the best commercial funding options available to you, please call us today on 087 9344655, email us at info@ie.thrivefinancialconsultancy.com, or visit our website.