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Bridging Finance Uses

Bridging finance is a short-term loan secured against property in your portfolio. Enness can arrange bridging finance for property in Dubai or elsewhere - against investment property you own in the UK, Europe or in other countries in the MEA region, for example.

Bridging finance allows you to release equity tied up in your property by using it as collateral for the loan. A bridging loan can be used to buy a new property before your old home is sold, to buy a property at auction, to buy a property without going through a lengthy mortgage application process, to develop a property before selling it, or to solve a problem, if you wanted to buy an unmortgageable property for example.

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Bridging Finance: Enness’ Offer

  • Receive abridging loan offer within 24 hours
  • Use any type of property as security
  • No minimum or maximum loan amount
  • Benefit from competitive interest rates (around 2.7% - 25% annually)
  • No minimum term
  • Use bridging finance for Dubai or international real estate
  • Access regulated and unregulated bridging loan lenders

Is Bridge Financing Right For You?

Bridging finance is a type of short-term borrowing. These loans typically run from a few weeks to up to three years. They are known for being quick to set up, with funds available to borrowers in a matter of days or weeks – much faster than a bank loan or other types of lending.

Bridging finance is commonly used by high-net-worth individuals who need access to significant capital rapidly. As a result, this type of finance is known for being something of a problem solver and an opportunity creator. Bridging finance is frequently utilised if other lenders have turned you down or are unable to lend to you. The underwriting process for this type of borrowing is simpler than for other types of lending (including mortgages), which is what makes it faster to arrange.

There are disadvantages and benefits to bridging loans, just as there are to any other type of lending, and it's critical that you understand these before proceeding with this type of finance. Enness' Dubai-based bridging finance brokers will work with you to answer your questions, explain bridging financing in greater detail, and determine if it is a good fit for you. Enness has a global footprint and access to all the lenders in the bridging finance space, so they can deliver cross-border bridging deals quickly and efficiently.

Bridging Loan Interest Rates

You will usually pay the interest rate as a percentage of the loan amount. Normally, this rate is calculated on a monthly basis. 0.45%, 1%, or 2% every month, for example.

Retained Interest

Interest payments are deducted from your gross loan amount and are used to cover the interest costs as they accrue – in other words, you are pre-paying the interest on the loan.

Rolled Up Interest

Rather than paying interest monthly, interest is added to the outstanding capital. This is usually calculated monthly. You will pay the interest back – along with the outstanding capital – in a lump sum at term.

Serviced Interest

In this case, you will be required to pay the interest cost each month, just like you would with a mortgage.

While how you can repay interest can seem relatively unimportant compares to other aspects of the deal, they can have a significant impact on the overall amount you pay and what you can borrow. Interest repayments will also impact your cash flow, so determining which option is best for you approaching lenders that will let you pay interest in the way that is most advantageous to you is criticial. Enness' bridging financing broker will go over all of the possibilities and help you to determine how much each one will cost and how beneficial it is in your situation. Your broker will then negotiate with lenders to deliver your preferred choice.

Exiting A Bridging Loan

Your exit refers to how you repay your bridging loan. There are several common scenarios, including:

Selling the property that's used as collateral for the loan at a profit. You'd this capital to pay back your bridging loan.

Refinancing. Borrowers frequently negotiate a longer-term loan. The bridging loan will be repaid by your new lender, and you will take a new loan from your refinancing lender – usually a mortgage or long-term finance vehicle.

Here, bridging finance effectively gives you the time you need to negotiate and choose an optimal long-term finance package. Banks in particular can offer very competitive loans, but the application process is usually lengthy and isn't always an option when you need to borrow money quickly. Many borrowers use bridging finance as a means to borrow money quickly, before going on to look at long-term (and usually cheaper) financing packages with a bank or another lender.

A liquidity event or the sale of other assets. In these cases, you will pay back the bridging loan by selling assets, real estate, securities, or business holdings. You could also use a lump-sum generated through a major liquidity event (sale of a business, inheritance, etc) to repay the loan.

Whatever your plans, your lender will want to understand your plans and ensure they are solid. You'll need to come up with a viable and reasonable exit strategy that a lender is comfortable and agrees with. Your bridging finance broker will go over your options with you and approach the lenders who can accommodate your needs.

Bridging Finance For Dubai Residents

Bridging loans can be a very advantageous way of raising capital. Finding the best bridging loan isn't always easy, however, especially if you're working alone and approaching lenders one by one. There are a huge number of lenders, all offering something different, and offers can be difficult to compare. You may also find that handling the transaction on your own can be daunting, given there are lots of parties involved that all have to be managed and directed. Whatever your needs, Enness will go straight to the source of the best bridging loan rates and terms, based on your requirements, circumstances, and background.

Enness bridging finance brokers have a base in Dubai, and access to lenders across the MEA region as well as international players. Enness can broker bridging finance regardless of where you are based, your nationality, how much you want to borrow or the location of the property you will use as collateral for the loan.

As well as sourcing and negotiating a competitive bridging finance package, your broker will assist you to stay on top of the transaction, ensuring that all parties (legal teams, valuers, and lenders) are working together to meet your deadline and requirements. Enness works exclusively in your best interests at every stage of the deal, troubleshooting any potential issues that arise during the later stages of the deal and through to completion.

Auction Finance

Buying property at auction is becoming increasingly popular, whether in Dubai, the UAE or to buy investment property abroad – auctions are increasingly common in the United Kingdom, for example. Actions offer a way for sellers to dispose of property quickly and buyers can often snap up a relative bargain.

Most auction buyers don't have enough liquid capital to purchase the property outright, or if they do, doing so is not beneficial from a fiscal perspective (or is complex to arrange in terms of liquidating securities and so on).

Different countries have different systems for buying at auction, but it is largely the norm to need to make a deposit and then pay the full outstanding amount in just a few weeks. Because a standard mortgage takes longer to organise than the amount of time you have available to pay for the property bridging loans are often used to finance an auction purchase.

If you know you want to buy a property at auction, whether in Dubai, the UK or elsewhere, get in touch with Enness as early as possible. Your auction finance broker will source an in principle bridging finance offer for you ahead of the auction. This will allow you to determine how much you can spend on the property and ultimately, the maximum you can bid.

Auction-financed properties are frequently decrepit or in need of refurbishment. If you wish to acquire a property that you plan to develop or restore later, auction financing will be available to you. Enness' bridging financing brokers will be able to negotiate a competitive finance package for you, even if you are a first-time developer. If you're a first-time developer, you may need to submit additional collateral, but auction financing isn't out of the question.

Bridging Finance For Property Development

Bridging finance is used by developers to build or develop real estate in Dubai, the United Kingdom or in other countries. Bridging finance can be used to fund property development and, in some cases, to purchase the land on which the property will be built. Developers also use bridging finance to consolidate multiple loans if several different lenders have funded distinct phases of a project, making payments more manageable.

Enness brokers international commercial and residential bridging loans, helping developers access competitive finance packages whether you're a seasoned developer or a first-time real estate developer.

If you're a first-time developer - particularly if you are based in Dubai and are developing real estate elsewhere - you may need to anticipate that you will need to put forward more collateral or borrow less than more experienced developer. Borrowing is certainly a possibility if you are a first-time developer, particularly if you have solid finances or a high net worth. However, expect lenders to spend time looking at your plans, ability to oversee the project, your team and how you plan to approach the development to bring it to completion on time and on budget.

Bridging loans for property development always need to be negotiated on an individual basis. Lenders will want to know about your plans, your exit strategy, development costs, the development's location, and the property's existing and future value.

Enness has close professional relationships with all of the lenders in this relatively niche sector. This includes relationships with the institutions that can offer development finance to Emirati nationals, Dubai residents, British expats living in the Gulf and residents of EMA regions to access development finance. Your broker will also be able assist you if you require a financing solution to solve a cash flow or capital problem that has occured during the development of your property.

International Bridging Finance

Bridging financing originated in the United Kingdom but is today used internationally, and it can be especially useful if you have a global property portfolio or if you are a British expat with property in or outside the UK.

Many borrowers use bridging finance to raise funds to pursue an opportunity, solve a problem or create liquidity for a project in Dubai, the UK or elsewhere. Your objectives, the location of the property you want to use a security for the loan and where you want to deploy the capital will often determine how much you can borrow and the lenders that will be a best fit for your scenario.

International bridging finance deals need to be approached carefully. They are very possible, but a broker with a track record of delivering this type of deal, knowledge of the process and access to the lenders that offer this type of finance is critical to success. If you are considering bridging finance for an international transaction (for example, to buy a home or investment property in another country), don't expect things to necesserily be the same as they are in Dubai (or the UK, if you are an expat), especially from a legal perspective. A broker that can explain the ins and outs of the transaction and help structure the deal for you most advantageously will be key.

If you're looking for international bridging finance, Enness' brokers can assist you and cover all the necessary bases to ensure a seamless and quick transaction. Enness' bridging finance brokers can assist you in negotiating the best deal and navigating issues such as foreign exchange risk and determining which legal experts or valuers will be best suited to advise you.

Large Bridging Finance Deals

Many Dubai-based borrowers are in the market for very large bridging loans. However, not every lender can offer these types of bridging loans, and you may find it difficult to source offers of more than £1 million if you approach lenders on your own.

If you have a complicated situation or background (multi-currency income, a high net worth but comparatively little income, you are an entrepreneur) finding a lender can also be difficult if you are operating alone. Not every lender will be able to accommodate you, and less so if you also want to borrow a significant amount (usually the equivalent of £1 million or more). There are lenders that can handle significant bridging loans, but these tend to be niche players or specialists and are more difficult to approach or find through traditional means. With access to these lenders and able to support every aspect of the deal alongside you, Enness will make it easier and faster to access very large bridging loans.

Because there are fewer lenders in this niche of the market, Enness will also be key in securing the best deals and delivering a deal that offers the terms and flexibility you want. Negotiations will be handled by your bridging financing broker, who will ensure that your loan is tailored to your situation and fulfills your demands. Then Enness' team will help keep the transaction on track and collaborate with the other parties involved (your legal team, the surveyor, your lender, etc) to see it through to completion quickly.

A large bridging loan does not imply that the transaction will need to take longer: Enness will source offers for large bridging loans as swiftly possible and always within the timeframe you require.

Understanding Regulated And Ungregulated Bridging Loans

Bridging loans are classified as either regulated or unregulated. Regulated bridging loans use a property that you already own and that you live in, or that you will own and live in, in the future (i.e. you are buying your next primary residence) as collateral. A regulated loan also involves property that you own that you rent to a family member - a child at university or an elderly parent, for example. In the UK, regulated bridging loans are regulated by the FCA, meaning you will be subject to certain requirements regarding affordability. If you are looking for a regulated bridging loan, lenders will examine your income carefully and net worth to verify that you can comfortably afford this type of finance.

Every other form of property is covered by unregulated bridging loans. This could include buy-to-let property, investment portfolio property, or vacation homes, as well as development or commercial property.

Enness can assist you to broker both regulated or unregulated bridging loans, no matter your requirements or how much you are looking to borrow against your property.

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Contact Enness

If you have questions, comments or would simply like to talk more about bridging finance and it’s uses, get in touch. A broker will reach out to you to discuss your needs and talk in more depth about any questions or queries you have.

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Bridging Finance Guide

Bridging finance comes in many shapes and forms. You can take advantage of bridging finance if: 

  • You have complex or low income 
  • A significant portion of your wealth is tied up in assets like property 
  • You know banks and mainstream lenders won’t want to lend for the project you want to explore 
  • You have an ambitious project and aggressive plans 
  • The opportunity you wish to pursue requires significant borrowing 

The relatively short-term nature of bridging finance can be challenging, requiring experience, contacts and negotiating skills to secure the best possible terms with as much flexibility as possible. Extremely competitive interest rates, staged funding release to save on interest and utilising assets and income as security are vital elements of bridging finance deals. 

We excel in these areas as well as pre-arranging cheaper traditional refinancing of bridging loans at the end of the term.