There are two types of bridging loan are available:

Open Bridging loan

This type of bridging loan is available when you have not yet finalised terms on which you are selling your own home, but are going ahead with one you are buying.

Closed Bridging loan

This type of bridging loan is available when you have agreed terms on home that you are buying and one that you are selling, but there is a delay in moving.

Bridging loans are available for all types of clients, from limited companies to individuals; from those with excellent credit status to those who have found it difficult to obtain mortgages and loans, including businesses, self-employed and those with a poor credit history.

Many different types of assets can be considered as security for a bridging loan, from residential, semi-commercial and commercial properties or land. Properties can be fully or partially developed, in perfect condition or need of renovation, or be of standard or non-standard construction.

Generally, you can borrow between £25,000 and £500,000 as standard. Larger loans are possible but may take slightly longer to arrange.

Lenders will usually allow bridging loans of up to 65% of value of properties - less any existing mortgage. But this will depend on lender so shop around for best deal.

As they are more risky for lender than usual homeowner loans, bridging loans are more expensive and should only be used where you are fairly certain to repay them within a short period of time.

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To fund purchase of a property abroad.

Provide temporary funding for purchase of a 'defective' property, pending completion of repairs. To fund urgent purchase of a property, pending arrangement of a long-term mortgage.

To raise capital for any purpose, pending a sale of security property.

These are some of benefits of a bridging loan:

An easy and manageable route to generating extra cash.

No survey, valuation or solicitors fees to pay.

You can use cash for any purpose.

Bridging finance is increasingly used for property development including site purchase, self-build projects and property conversions. In property investment market bridging loans can be used for completing purchases quickly; for example, when property has been secured at auction. They can also be cost-effective for clients wishing to acquire property for refurbishment and re-sale.

In fact, bridging finance can typically be used for any genuine commercial purpose as a short-term measure. Because of short-term nature of loan however you should expect to pay more interest and higher fees than with a long-term loan.

Some lenders offer fast in-principle decisions and may be able to release funds for clients very quickly. This 'quick' element allows clients to secure a property speedily, and with minimum of stress.

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