For some people, bridging finance is a shrouded mystery, and as a result, they don’t or can’t see the benefits it can offer in the right circumstances. Many investors see it as expensive and slow (which is ironic, as the industry all talks about its fast, flexible service). And something you only use when everything else has gone wrong. In reality, modern bridging can be a powerful, flexible tool if you understand how it really works.
Let’s tackle five of the biggest myths.
- “Bridging is always too expensive”
Bridging finance used to come with eye‑watering rates and hefty fees. Today, increased competition and better regulation mean pricing is far more transparent and often much more competitive.
When used for the right deal, a quick purchase, an auction opportunity, or a time‑sensitive refinance, the overall return can far outweigh the short‑term cost of the loan.
- “It takes ages to arrange”
One of the strengths of bridging is speed. While traditional lenders can take weeks or months to approve a loan, many bridging lenders can move from application to completion in a matter of days, provided the paperwork and valuations are in order.
For investors trying to secure a deal in a tight timeframe, that speed can make the difference between winning and losing an opportunity.
- “It’s only for people in trouble”
There’s a persistent belief that bridging is a ‘last resort’ product for distressed borrowers. In practice, sophisticated investors and developers use bridging strategically:
- To secure properties at auction
- To complete purchases before selling an existing asset
- To fund light refurbishments or conversions
It’s not a sign of trouble; it’s often a sign of smart timing.
- “Bridging is too risky”
All lending carries risk, but bridging finance doesn’t have to be reckless. The key is clear exit planning, knowing exactly how the loan will be repaid, whether through sale, refinance, or another source of capital.
With sensible leverage, realistic valuations, and a credible exit, bridging can be a controlled and calculated part of an investment strategy. Some borrowers have a backup exit strategy, just in case their original plans are delayed.
- “It’s only for big developers”
Bridging isn’t just for large‑scale projects. Smaller landlords, first‑time investors, and business owners regularly use it too:
- Raise short‑term working capital
- Complete property purchases quickly in lieu of converting into a term finance, like buy-to-let mortgages
- Fund quick refurbishments to add value
The market now includes products and loan sizes tailored to a wide range of investors, developers and landlords.
Final thought: Bridging finance is not a magic solution, and it’s not the villain it’s often made out to be. Used thoughtfully, with proper advice and a solid exit strategy, it can be an effective way to move quickly, unlock opportunities, and grow your portfolio.
At Inflow, we work with you to ensure that using bridging and development finance is the right choice and help you determine the best exit strategy(s) that will work.
215 Marsh Road, Pinner, HA5 5NE
