Unregulated Bridging Loans

An unregulated bridging loan is a short-term, property-backed loan designed to bridge a gap in funding. These loans are considered unregulated if they are secured against a property where the borrower has never lived and will never reside.

The term "unregulated" means the loan is not covered by the protections of the Financial Conduct Authority (FCA). Typically, unregulated loans are used for business or investment purposes, such as purchasing buy-to-let properties. Even mainstream banks offer unregulated loans.

When taking out an unregulated loan, borrowers have less protection compared to regulated loans, as they are not subject to FCA regulations. The FCA rules are designed to ensure fair treatment of customers in both the advice provided and the management of the loan once it is in place.

What Can Unregulated Bridging Finance Be Used For?

Unregulated bridging finance can be used for a wide range of purposes. The most common uses include:

• Property Refurbishment or Conversion: Adding value to a property through renovations or conversions.
• Quick Property Purchases: Purchasing property quickly, such as at an auction.
• Property Flipping: Buying, renovating, and selling a property for profit.
• Repaying Development Finance: Paying off existing development loans.
• Business Funding: Providing a cash injection for business purposes.
• Expanding a Property Portfolio: Growing your investment in real estate.

How Much Can I Borrow?

We offer unregulated bridging loans starting from £10,000, with no upper limit on the loan size.

The amount you can borrow depends on factors such as the value of your property, the loan-to-value (LTV) ratio of your application, and your ability to repay based on your exit strategy.

For most applications, the maximum LTV we offer is 80%, but for property refurbishment projects where value is expected to increase, we can offer up to 90% LTV.

What is the Difference Between Regulated and Unregulated Bridging Loans?

Choosing the right loan for a property transaction can be challenging, not due to a lack of options, but because of the vast number of regulated and unregulated bridging loans available. With so many products on the market, it can be difficult for investors to find the right lender for their needs.

There are two main types of bridging loans: regulated and unregulated. But what exactly distinguishes them, and how can investors determine which is best suited for their property investment? Let's start by defining both types:

• Regulated Bridging Loans: These are typically used by homeowners who are experiencing a shortfall in funds, often due to delays in a property transaction. The borrower resides in the property for which the loan is taken.

• Unregulated Bridging Loans: These loans are generally used by property investors, developers, intermediaries, and landlords to bridge payment gaps. The borrower does not live in the property, as the loan is intended solely for investment purposes.

Understanding the difference between these two types of loans is crucial for investors when selecting the right financing option for their property projects.