Here’s how they work and why they are such a popular option.

A bridging loan has many of the same features as any other type of commercial loan: It allows borrowers to access capital that can then be put towards working capital or fixed asset investment. 

However, there are some key differences between them: firstly, because they only last for a short period (between 3 months and 1 year), bridging loans aren’t suitable for longer-term projects. 

Secondly, unlike conventional bank loans which require detailed applications and credit checks (as well as proof of income), the UK bridging lenders typically offer their services without conducting extensive due diligence procedures. 

It means that borrowers can secure funds faster than would otherwise be possible with other types of commercial financing options. 

And finally, unlike traditional bank loans, bridging products don’t come with set repayment schedules; instead, repayments are made on demand once a borrower has fulfilled all contractual obligations. This means that payments depend on when borrowers need to make repayments rather than when they have to make them.