The bridging loan market in the UK is expanding rapidly, with over 20 companies offering commercial bridging finance at an array of rates.
This article will explore who the current top bridging loan providers for business are, and explain a bit about each company. If you would like advice about the right finance for your company, do contact us for the latest rates from a variety of lenders.
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United Trust Bridging Loans
United Trust is a specialist provider of alternative finance, including bridging, asset, business loans and development finance. It is currently experiencing rapid growth, partly due to a partnership with the British Business Bank around lending for smaller house builders.
It offers both regulated and unregulated bridging loans, using a combination of both 1st and 2nd charges. It offers loans between 75k and 15m, requiring a minimum property value of 150k for security.
Octopus Bridging Loans
Part of the larger Octopus Group, OBL offer commercial loans from as little as 0.75% pcm for up to 24 months. The loans can be used for acquisitions, property finance or equity release, and you’ll be benefiting from an award winning team that can lend up to 25m.
Originally an investment group, Octopus Finance manages funds of over 6bn meaning this ambitious company is bringing a lot of resources to making its offerings competitive.
Founded in 2011, Greenfield is a specialist bridging lender, chaired by Steve Smith who founded Poundland. Offering both regulated and unregulated loans and boasting a turnaround time of as little as a week, Greenfield is also a lender patron of the National Association of Commercial Finance Brokers.
They can arrange finance from £26,000 to £5m for a loan length of up to 12 months.
Considering one of the fasted growing Fintech firms in the UK, LendInvest has huge ambitions. Backed by Skype founder Niklas Zennström’s European venture capital investment fund Atomico, it boasts an extremely diverse capital base, and a powerful group of institutional investors that includes Citibase.
LendInvest offers bridging finance for up to 75% of loan value, lending up to £15m.
Founded in 2014, Oblix is a specialist provider of bridging and development finance, seeing fast growth at the moment. Offering rates from 0.65% pcm, their target market is specifically property investors and developers seeking flexible funding of £50,000 up to £5m.
Loans can run up to 24 months, with a 1% exit charge in the case of early redemption. Oblix continues to grow fast, recently securing £50m funding from OneSavings Bank (OSB) in order to enhance its current product range.
Funding 365 Bridging Finance
Three structured finance experts from major financial institutions came together to form Funding 365 in 2013. Much of the ethos of the company is around ethics and personal relationships in contrast to a market they say has been flooded by standard product offerings and a lack of transparency.
Their rates start from 0.75% pcm, and there are no loan acceptance fees, early repayment penalties or hidden exit fees.
Despite its new status as a bank, Masthaven has been offering property finance for over a decade now, and has strong credentials in that area. A self-titled ‘digital bank’ Masthaven’s USP is around blending the convenience of a digital bank with old fashioned customer service. Counting the billionaire Pears family as shareholders, Masthaven offering commercial bridging of up to £1m for periods of up to 18 months.
Rates from 1.10% per month with a maximum LTV of 60%.
Launched in 2018, Tuscan Capital was founded by Former CEO of Omni and Fortwell Capital Colin Sanders. Funded by Quilam Capital. It offers unregulated bridging for personal and semi-commercial properties to a maximum LTV of 70%.
They also offer a competitive refurbishment funding package targeting commercial developers to a maximum property value of £3m.
Bridging Loan Rates Calculator
We’ve created a detailed bridging loan calculator which you can find here. Use this tool to work out the kind of sums a bridging loan will entail, so that you can approach the lenders with a clear idea of what to expect.
Which Banks Offer Bridging Loans?
While many banks do offer bridging loans, they have grown more reluctant to lend since the financial crisis of 2007-2008. In many ways, this very situation fuelled the tremendous rise in alternative lenders who arose fill the gap in the bridging market.
In each instance we look for the best possible loans for you, based on the complete variety available on the current market. That does include some offerings from traditional banks but more often than not the deals offered are significantly less appealing, with a higher bar to entry.
How Much Does a Bridging Loan Cost?
Bridging loans are amongst the most expensive forms of short term finance. Lenders will generally charge at least 1% interest per month, plus another 1% as an arrangement fee, and a further percent as an exit fee.
With these figures in mind, bridging loans are best suited to lucrative, short term deals such as those in the property development sector, where time is of the essence. Having a clear exit strategy is also essential.
Bridging Loans are an extremely fast form of finance which funds released within 3 days in some cases. A more average time frame, however, might be 2 weeks.
Bridging loans are intended to be short term, typically lasting from 1 to 12 months, although they can extend to 24 months in some cases.
With enough security, 100% bridging finance is possible, especially where the deal is compelling and there’s a clear exit strategy.