How do Bridging loans Work
Bridging loans offer fast funding for property investors, landlords, and developers to move quickly, whether purchasing at auction, refurbishing a property, or securing a time-sensitive opportunity.
Unlike traditional mortgages, which can take weeks or months, bridging loans offer rapid approval, often within 24 to 48 hours, and can complete within 2 to 3 weeks.
The Scottish legal framework, including legally binding “missives” at offer stage, make speed crucial. A bridging loan fits perfectly into this fast-paced environment, giving buyers the edge when timing is everything.
If you’re purchasing at auction or facing a tight deadline, work with a Scottish based solicitor experienced in bridging loans, they’ll help meet the tight completion deadlines that are common north of the border.
Table of Contents
- How do bridging loans Work
- FAQs About bridging loans
- Key Features of Bridging Finance
- Bridging Finance Trends for 2025
- Popular uses for a Bridging Loan
- Common Bridging Loan Mistakes to Avoid
- What Makes a Good Exit Strategy?
- Real-Life Case Studies
- Types of Bridging Loans Available
- Bridging Loan Interest Rates and Payment Options
- How to Get a bridging loan
FAQ'S ABOUT BRIDGING LOANS
💬 How fast can I get a bridging loan?
💬 What are the main reasons people use a bridging loan?
💬 Is bridging finance only for experienced developers?
💬 What’s the biggest risk with bridging loans?
💬 Can I use a bridging loan for auctions or refurbishments?
💬 Will my credit history affect my chances?
💬 Can I use bridging to buy land or commercial property?
💬 What are the main advantages of bridging finance?
KEY FEATURES OF BRIDGING FINANCE
Property investors and developers gain rapid access to funding with a bridging loan, ideal for auction deals, site acquisitions, refurbishments, or securing opportunities before long-term funding is in place.
• Loan Size: Loan amounts typically range from £25,000 to several million pounds, depending on the property's value and the lender’s criteria.
• Loan Term: They are typically structured over a period of 1 to 24 months, offering flexibility without long-term commitment.
• Fast Access to Funds: Approvals in as little as 24 hours, ideal for time-sensitive property transactions.
• Flexible Loan Usage: Typically used for property purchases, flips, auction buys, or short-term cash flow. Land purchases can also benefit, offering fast funding ahead of planning permission.
• No Early Repayment Charges: Many lenders offer early repayment flexibility, helping minimise interest costs.
• Security: Bridging loans are typically secured on property or land, with many lenders accepting multiple properties as collateral for higher loan amounts, and can allow borrowing up to 100% of the purchase price.
If you're purchasing a property at a discount to its market value, our specialist finance may offer enhanced LTV options. Learn more in our dedicated guide to below market value finance.
SCOTTISH BRIDGING FINANCE TRENDS FOR 2025
The Scottish property landscape continues to evolve rapidly. In Q1 2025 alone, we’ve seen a 43% increase in auction-related enquiries compared to the same period last year. This isn’t just about speed. It reflects a broader investor shift towards value-led acquisitions, especially in regeneration zones across cities like Dundee, Stirling, and Kilmarnock.
Appetite in Secondary Towns: While Glasgow and Edinburgh remain busy, our deal pipeline tells a different story: more buyers are now targeting ex-LA flats and mixed-use opportunities in smaller towns where yields are stronger, competition is lower, and local regeneration funding creates upside.
Glasgow and Edinburgh still dominate the Scottish enquiry level, but in 2025 we’re seeing much sharper deal flow in secondary towns, places with overlooked stock, high rental demand, and open-minded lenders. It’s a sign that professional investors are thinking beyond postcode prestige.
Planning Gain Strategies - On the Rise: More developers are using short-term funding to acquire sites with uplift potential, then unlocking higher GDVs through attaining planning consent. Not only does this allow for better exit financing, but it also puts developers in a stronger position with lenders who reward asset enhancement.
Developers used to see planning gain as a bonus. Now, it’s the whole strategy. We’re seeing more clients use bridging loans in Scotland to acquire marginal or brownfield sites, then unlock value with planning consent. It’s not just about the uplift—it’s about being able to approach lenders with a stronger story, which can mean sharper terms or access to development funding that wasn’t an option 6 months earlier.
Exit Finance Now a Lender Favourite: With build delays still common, many Scottish developers are turning to an exit-ready loan. These are especially appealing to lenders now offering discounted rates where properties are wind-and-watertight or near completion. It’s become a favoured backstop strategy that avoids unnecessary pressure during the tail end of a project.
Exit finance is no longer a last resort, it’s a proactive tactic. With lenders now tailoring rates for near-finished builds, savvy developers are building it into their strategy from day one. It gives them breathing room when utility delays, sales slippage, or survey hold-ups threaten to derail cash flow. The key is structuring it early, not scrambling for it later.
Shifting Appetite Among Lenders: While high-street banks remain cautious, especially with non-standard proposals or complex borrower profiles—niche lenders are becoming more dynamic. We're seeing increased flexibility around credit history, property condition, and use-case, provided the borrower has a clear, credible exit. For both seasoned and first-time investors, this shift has opened new doors. However, access to these opportunities hinges on having a broker who can properly position the deal and navigate lender preferences, which are shifting month to month.
It’s not just about your experience anymore, it’s about your plan. Lenders are far more receptive to borrowers who can show a defined exit, even if the credit story isn’t perfect. Six-figure finance deals are not uncommon this year for clients with historic CCJs or unusual security, simply because the exit made sense. The deal narrative matters now more than ever.
POPULAR USES FOR BRIDGING LOANS
Property Development:
Purchase property for refurbishment and onward sale or retention. Refurbishment costs can often be funded through staged drawdowns, similar to property development finance.
Auction Purchases:
Property auction finance provides the certainty and speed needed to buy property at auction, where completion deadlines are tight.
The BRRR Strategy:
Landlords and developers use bridging to fund the initial purchase and refurbishment for Buy Refurbish Refinance Rent projects before refinancing with a buy-to-let mortgage.
Land Purchase:
A bridging loan can help you acquire plots for residential or commercial development quickly while awaiting planning permission.
COMMON BRIDGING LOAN MISTAKES TO AVOID
Bridging finance is powerful — but there are pitfalls to watch for:
No clear exit strategy: This can lead to rushed decisions or costly extensions.
Overestimating property value: May result in lower loan-to-value (LTV) offers or funding delays.
Legal timing issues: Delays with solicitor coordination can derail your timeline, especially in the Scottish legal system.
Pro Tip: Always work with a solicitor experienced in bridging transactions and ensure valuations are realistic.
THE LENDER REQUIREMENT: MASTERING YOUR EXIT STRATEGY
Lenders require a clear and realistic exit strategy before approving an application. Common exit strategies include:
1. Selling the property that is being purchased.
2. Selling another property.
3. If you want to retain the property and rent it out, you can repay the finance by seamlessly switching to a commercial or buy-to-let mortgage.
4. Using a development exit loan while you're waiting for a property sale to finalise or waiting for long term funding to complete.
REAL-LIFE CASE STUDIES.
Off Market Purchase
Client Profile: Tom, a new developer client in Edinburgh.
Objective: Complete the transaction within a tight timescale.
Property Details: A two-bedroom flat valued at £220,000, acquired for £180,000.
Challenge: Tom had only 2 weeks to complete the transaction, which his bank traditional financing couldn't accommodate.
Solution: A bridging loan was set up which covered the purchase price and was based on the surveyors valuation. The client also used an already owned flat as additional collateral.
Outcome: Tom completed the deal on time. After a small renovation, he then remortgaged achieving a £30,000 equity gain.
Key Takeaway: The short-term loan helped speed up the purchase. It also made it easier to switch to a commercial loan facility for retaining the property.
Renovation and Sale for Profit.
Client Profile: Emma and Mark, experienced renovators in Glasgow.
Objective: Buy, Renovate and resell a a renovation opportunity acquired below valuation.
Property Details: A semi-detached house valued at £400,000, bought for £320,000.
Challenge: They needed quick and reliable short term financing for the purchase and renovations within a limited timeframe.
Solution: Bridging finance was set up which covered the purchase price and provided extra funds on a monthly drawdown basis for a back to brick refurbishment.
Outcome: The property was refurbished and was sold for £480,000. After redemption of the purchase and development facility, they profited £60,000.
Key Takeaway: Access to flexible finance allowed Emma and Mark to transform this run down semi-detached house and profit from the sale.
Chain Break Success in Aberdeen.
A property investor in Aberdeen faced a chain break when their buyer withdrew days before completion.
Using a £150,000 bridging loan, they completed the new purchase and resold the original property within 3 months — repaying the loan early and avoiding major disruption.
This flexibility is one of the key reasons why short-term property loans continue to grow in popularity.
AVAILABLE TYPES OF bridging loan
Lenders typically offer four main types of bridging loans in Scotland:
Closed Bridging
• Fixed repayment date.
• Suitable where there is a clear exit strategy, such as a property sale or mortgage offer.
Open Bridging
• No fixed repayment date at the outset.
• Useful if your exit strategy is still being finalised.
Unregulated Bridging
An unregulated loan is a short-term funding option not overseen by the Financial Conduct Authority (FCA). Typically used by property developers, investors, landlords, and businesses, these loans offer fast completion, making them ideal for auctions, refubishment and new build development projects, or quick property purchases. With the focus on the property or land rather than the applicant, lenders have greater flexibility in terms and criteria.
Regulated Bridging
A regulated loan is a short-term funding option governed by the Financial Conduct Authority (FCA) in the UK. It provides fast access to funds for time-sensitive property transactions while ensuring transparency, fairness, and borrower protection through responsible lending rules. These loans apply when secured against a residential property used, or intended to be used, as the borrower’s or a close family member’s home. As such, they involve strict affordability checks and consumer safeguards.
INTEREST RATES AND PAYMENT OPTIONS
Typical rates for a bridging loan range from 0.4% to 1.5% per month, depending on factors such as loan size, LTV, property type, and borrower profile.
Borrowers generally have three ways to manage loan interest:
Monthly Payments : Paying interest monthly is an option. However, like most types of mortgages you will need to prove affordability by declaring your income, and like any credit agreement, you also need to keep up with the monthly payments.
Rolled up/deferred : Interest is added to the account on a rolling basis and repaid when the property is sold or switched to a long term lending solution.
Retained : The is by far the most popular way to cover interest for many borrowers. The lender calculates the interest amount due for the agreed term and adds it to the principal amount advanced. If you redeem your loan early, you will receive a credit for any unused loan interest from your final amount.
HOW TO GET A BRIDGING LOAN - STEP-BY-STEP
The process of applying for a bridging loan in Scotland is straightforward, allowing for quick approval and completion.
Here's the typical application process:
Application Steps:
1. Initial Inquiry: Start by consulting with a specialist loan broker like Evolve Finance, who has experience in residential and commercial bridging loans and understands the local property market. We will assess your needs and provide a tailored quote.
2. Valuation: An independent property valuation is carried out. This helps to establish the market value of the property being used as security.
3. Approval and Offer: After reviewing your application, the lender provides a formal offer of loan. This offer includes the loan amount, loan rate and repayment schedule.
4. Legal Work: Solicitors handle the legal paperwork. They make sure everything follows local property laws and the lender's offer.
5. After the legal process is done, the loan is released by the lender. This usually happens imminently after final approval.
Speak to a Bridging Loan Expert
Bridging finance in Scotland is a vital financial tool for investors, landlords, and businesses needing fast and flexible funding solutions. Whether you're investing in Glasgow’s property market, renovating a flat in Edinburgh, or buying land in rural Aberdeenshire. With traditional lenders often slow or inflexible, bridging finance provides the speed and certainty needed for time-sensitive opportunities like auction purchases, off-market deals, and property refurbishments.
WE SPECIALISE IN
Bridging Loans
We provide a market-leading bridging finance, backed by over 30 years of experience delivering professional, tailored funding solutions for developers, landlords, and investors.
For buyers targeting distressed or undervalued assets, we also offer specialist funding options for discounted property purchases.
Get a decision in principal in just 4 hours, with a streamlined process that ensures fast and reliable completion.
Our Bridging Loan Experience.
Buying at Auction.
Buying auction properties can be a thrilling venture, offering the chance to buy a valuable property often at a competitive price. However, the rapid pace and immediate financial commitments of auctions need a specialised approach. Auction Finance is a form of bridging loan and is tailored for this exact scenario, providing a swift and flexible financial solution.
It bridges the gap between the auction win and the future sale or refinance.
Our Auction Finance
Experience.
Development Exit.
A development exit loan becomes relevant when your development is approaching completion or has already reached practical completion, but you’re awaiting final sales.
It's commonly used for single residential units, small developments and multi-unit towers.
This financial solution offers developers the essential flexibility to raise capital and seamlessly transition from one development to the next.
Our Development Exit Experience.
3 REASONS TO CHOOSE US AS YOUR SOURCE FOR PROPERTY FINANCE.
If you're exploring short-term property funding, we've helped clients from Aberdeen to Ayr secure funding tailored to their individual project goals. With local expertise and a speed-focused approach, we help give you the edge in competitive situations.
Highly Experienced
We have over 30 years experience and can offer innovative financing methods for developers and landlords.
Services
We offer Bridging loans, Refurb & New Build Development Loans and Buy to Let Mortgages.
Quality Support
We'll keep you informed every step of the way, and if needed continue to support even after completion.
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