Bridging Loan Brokers: Use a broker's expertise for fast, effective short-term financing 

By Georgia Galloway | Monday 7th August 2023 | 25 minute read

A Bridging Loan Broker secures best-rate short-term financing for borrowers and valuable deal flow for lenders.

A bridging loan broker connects borrowers with suitable lenders, offering expertise in negotiating terms and guiding clients through the loan process, distinct from direct lenders who directly fund loans.

According to Finbri's Bridging Finance Survey, brokers are the most popular route for borrowers to source bridging loans. Brokers provide invaluable assistance in obtaining the best rates and terms for borrowers.

They are a constant source of new lending opportunities for lenders, demonstrating how important bridging loan brokers are to the sector. This article provides a deep insight into the role of a bridging loan broker in securing bridging loan finance. 

Bridging Loan Brokers help source the best loan rate

What is a Bridging Loan Broker?

A "bridging loan broker" is a specialised financial intermediary who facilitates short-term bridging loan financial solutions for borrowers. A broker will help borrowers source the best loan rate for their specific requirements from the whole market. 

Borrowers' most popular route to sourcing a bridging loan is through brokers, with 64% of bridging loans being sourced via a broker. 

(Source: Finbri, Bridging Finance Report 2023)

What is a Bridging Loan?

Bridging loans are short-term loans that cover a gap in a person or company's financing. A bridging loan is a secured loan, typically against real-estate collateral. As a bridging loan is a short-term financial product, it's usually taken for up to 12 months but can be up to 36 months, depending on the borrower's requirements. 

The amount of money that can be financed via a bridging loan depends on several factors, such as the equity available in the collateral, the maximum loan-to-value ratio of the lender, the borrower's credit profile and the borrower’s requirements.


What is the purpose of a Bridging Loan Broker?

A bridging loan broker aims to understand the client’s unique finance requirements and match that to the most appropriate bridging loan product available. A broker possesses in-depth knowledge of the lending market, which allows them to navigate and negotiate the best possible loan terms on behalf of their clients.

By leveraging their extensive network of bridging lenders, including family offices, private investors, private equity firms and institutional lenders, bridging loan brokers can source loans that align with each borrower's unique needs and circumstances, whether for residential, commercial, or development purposes. Their expertise ensures clients receive tailored advice and access to competitive rates, making bridging loan brokers an invaluable resource.


What is a “whole of market” Bridging Loan Broker?

A “whole of market” bridging loan broker is an intermediary who can access loans from a wide range of lenders, including traditional lenders such as institutions and challenger banks, specialist lenders such as family offices, private investors, and private equity firms. This breadth of the market gives the borrower the best chance of finding the most competitive deal on a bridging loan.


How many people use Bridging Loan Brokers?

Brokers are the most popular route for borrowers to source a bridging loan, with 64% of bridging loans are sourced via a broker, according to Finbri’s 2023 Bridging Finance Report.

The report also found the 5 most important reasons for choosing a bridging loan broker. These are listed below.

  1. Faster completion - Bridging loan brokers improve loan completion times.
  2. Getting the best deal - Brokers' can source the best deal available from the whole market.
  3. Better terms - Brokers' ability to access more favourable terms.
  4. Better rates - Brokers' ability to access more favourable rates.
  5. Advice & Support - Using a broker's experience to navigate the challenges of loan placement.

What fees do Bridging Loan Brokers charge?

Broker charges are common for financial service providers, ranging from 1-5% of the loan amount, influenced by the complexity of the loan and the borrower’s circumstances.

What is a Broker fee, and how much is it?

A bridging loan broker typically charges 1-2% of the loan amount, but that fee can vary from broker to broker. It's not uncommon to be between 2% and 5%, a flat monetary fee, or no broker fee. It depends on the broker's fee structure (how they are remunerated for service) and the borrower's circumstances. Additionally, some brokers may charge an application or processing fee. 

What is a Broker application fee?

An “application fee” (commitment fee), where charged, is a fee charged by the broker at the point of a loan proposal or agreement in principle progressing to an application. It's charged to ensure that the applicant is serious about applying for the loan, as the broker will not want to waste their resources on 'window-shoppers'.

Applications typically require one to two days of administration, depending on their complexity and the deal's specifics. The good news for the borrower is that it's also normal practice for the application fee to be refunded upon loan completion.

Understanding what fees will be charged before you work with a broker is important so there are no surprises. Reputable brokers will be transparent and detail the fees or charges for the bridging loan in the proposal.

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When should I talk to a Bridging Loan Broker?

A few instances exist when speaking to an expert in bridging loans, such as a broker, is advisable. Below are five examples of when talking to a broker about a bridging loan may be helpful.

  1. If you own real estate and its' available equity that is less than a 75% loan-to-value
  2. If you need to borrow money quickly
  3. If you need to borrow a large sum of money
  4. If you are unsure whether a bridging loan is the right option for you
  5. When you don’t know which lender is right for you

Bridging loans are a useful way to access large sums of money quickly, but it is important to ensure they are the right option for you. Speaking to an expert to learn more about how bridging loans could help you in your specific circumstances and the pros and cons of this type of finance will give you the knowledge to make a more informed decision. You may be surprised how much a bridging loan can help you achieve your financial goals. 

To speak with a bridging loan broker, call us today.

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How do Bridging Loan Brokers differ from Lenders?

Bridging loan brokers source bridging loan products and negotiate terms on behalf of their client (the borrower), whereas lenders provide the source of funds for the bridging loan. As such, bridging loan brokers and direct lenders play distinct roles in financing. 

Direct lenders, which include financial institutions and private entities, provide funds directly to borrowers. They offer loans from their resources, presenting a direct channel for borrowers seeking financing. In contrast, bridging loan brokers serve as intermediaries, facilitating connections between borrowers and the most suitable lenders for their specific needs. Unlike direct lenders, brokers do not supply funds themselves. Instead, they utilise their extensive market knowledge and relationships with various lenders to find favourable loan terms for their clients. This allows brokers to access a broader range of loan options and more competitive rates or terms than borrowers can secure.

The primary aim of bridging loan brokers is to foster a competitive lending environment, ensuring their clients receive the best possible deals. They achieve this by leveraging their access to numerous lenders, each with unique risk appetites and processes, to find those capable of fulfilling the borrower's time-sensitive requirements. Consequently, the choice of lender often extends beyond favourable rates or terms–it also considers the lender's ability to expedite the loan within the borrower's needed timeframe. Through this approach, brokers encourage lenders to offer more attractive rates and terms to secure the business, ensuring clients benefit from more advantageous financing solutions.

Moreover, brokers provide a level of personalised service that extends well beyond the scope of what direct lenders typically offer. This includes assistance with the application process, often completing much of the legwork, managing paperwork, and negotiating terms, which are crucial for borrowers navigating the complexities of arranging a bridging loan under time constraints. As brokers are paid only when the loan deal is completed, they have a vested interest in ensuring smooth communication between the lender and borrower and also help resolve issues well beyond the initial application being completed. Brokers are crucial in ensuring borrowers find the best financial product to meet their needs and receive guidance and support throughout the process, adding significant value to the borrower's experience.

How many people choose to go directly to bridging loan lenders? 

Only 36% of bridging loan borrowers source their bridging loans directly from lenders and primarily do so via recommendation (Finbri’s Bridging Finance Survey) because of the perception that it’s quicker to get a loan approved, direct communication, and the ability to avoid the fees that come with using a broker.

Should I go directly to a bridging loan lender instead of a Broker?

Going directly to a lender has one main benefit—the borrower will not have to pay broker fees, often saving them significant fees. The main cons of going directly to a lender are that the borrower will not have access to comparative quotes unless they approach multiple bridging lenders. Approaching multiple lenders is a laborious, time-consuming process - especially for the uninitiated, who are unlikely to know which lenders suit their funding requirements. Bridging lenders prefer dealing with brokers as it's significantly less time-consuming. Most lenders don't meet UK consumers' expectations of customer service.

What services do Bridging Loan Brokers provide?

Bridging loan brokers provide services that facilitate securing bridging finance for their clients. Primarily, they assess the client's financial needs and objectives to recommend the most suitable bridging loan products available from lenders. Their services include sourcing loan offers from a wide network of lenders, negotiating favourable terms and interest rates, and guiding clients through the application process. Additionally, they assist with compiling and submitting necessary documentation, ensuring compliance with lender requirements.

Bridging loan brokers also offer expert advice on loan structuring, helping clients understand the implications of various loan features. By leveraging their extensive knowledge and industry relationships, they aim to secure efficient, cost-effective bridging finance solutions tailored to each client's unique situation.


Why would I use a Bridging Loan Broker?

Borrowers would use a bridging loan broker to obtain a bridging loan when they want to quickly source the best rates and terms, need support during the loan application's lifecycle, or avoid deal fatigue. 


What are the advantages of using a Bridging Loan Broker?

The most significant advantage for a borrower using a bridging loan broker is that they will help you find the best deal (a combination of rates and terms) for a bridging loan. They know the market inside out and can point you towards lenders who offer the best rates and terms. Brokers have extensive reach across multiple sources of funds from speciality lenders, family offices and private investors and can help you find the best lender for your needs. They can also help borrowers avoid common pitfalls associated with bridging loans.

Borrowers use bridging loan brokers because they can often source bridging loans that borrowers could not source themselves. Brokers can typically source better rates and terms, but more importantly, they need to know which lenders can meet the borrower’s completion timeline for the loan.

5 reasons to use a Bridging Loan Broker

Whilst getting the best deal is the primary objective of both the broker and borrower, there are several reasons why a borrower should consider using a bridging loan broker. These reasons are listed below.

  1. Getting the best deal - Brokers drive down lender's rates by creating competition between lenders for the loan.
  2. “Whole of market” access - Brokers have access to the whole of market (institutional lenders, speciality lenders, family offices and private investors).
  3. Best-fit lending - Brokers understand a borrower's exact circumstances to match the requirements to the right lender.
  4. Pitching applications in the best light - Brokers know how to present the borrower's requirements so that lenders will see the value in the deal and want to lend against it.
  5. Avoid common problems - Brokers can help borrowers sidestep common issues when seeking finance and assist with the entire loan lifecycle from application to completion (closing).

What is bridging loan “deal fatigue”, and how can it be avoided?

Deal fatigue is when lenders become reluctant to reassess loan applications they've seen multiple times. Brokers mitigate this risk by expertly matching borrowers with the right lender from the outset, thus preventing repetitive submissions and ensuring the application is viewed with a fresh perspective. Their deep understanding of lender preferences and requirements allows them to tailor applications to meet specific criteria, enhancing the chance of approval without the diminishing interest often caused by direct, repeated approaches. Furthermore, brokers navigate the complex criteria, including loan value, security type, and borrower's financial profile, effectively communicating any changes or modifications that distinguish the application, thereby maximising the potential for success.

Are there any disadvantages to using a Bridging Loan Broker?

Yes, the main disadvantage of using a bridging loan broker is that they typically charge a fee of 1-2% of the loan amount for their services. This can range from a few hundred pounds to several thousand pounds depending on the loan size, so it's important to compare quotes and ensure the anticipated fees will likely be offset by the savings made before you choose your bridging loan broker. 


Is it better to use a Bridging Loan Broker or go directly to a lender?

When it comes to getting bridging loans, a few different options are available. You can use a bridging loan broker or go directly to a lender. Each option has its own set of pros and cons.

Pros and cons of sourcing your bridging loan from a broker or lender

Key consideration

Using a Bridging Loan Broker

Going Directly to a Lender

Access to the cheapest rates

Yes

No

Access to best terms

Yes

No

Creates competition between lenders

Yes

No

Ability to compare multiple products

Yes

No

Fast loan completion

Yes

Yes

Broker fee charged

Sometimes

No

Lender arrangement fee charged

Yes

Yes

Deal fatigue avoided

Yes

No


Can a Bridging Loan Broker secure better terms than I could on my own?

Yes, a bridging loan broker can secure better terms than an individual might manage independently. This capability stems from their in-depth market knowledge, extensive network of lending contacts, and negotiation skills.

Brokers understand the nuances of the bridging loan market and the current rates available and have insights into lenders' criteria and current deal-flow appetite, which enables them to match borrowers with lenders offering the most favourable terms for their specific financial situation. Additionally, the competitive environment they create by approaching multiple lenders can lead to more attractive interest rates, lower fees, and more flexible repayment options for the borrower. Their expertise and relationships can thus significantly enhance the terms of a bridging loan, benefiting the borrower and paying for itself in the fees the client saves.

How do Brokers stay informed about the latest bridging loan products?

Bridging loan brokers stay informed about the latest bridging loan products through continuous market research, professional development, and networking. They actively participate in industry conferences locally and globally, such as MIPIM (the world's leading real estate market event attended by 26,800 international property professionals), seminars, and training sessions to keep abreast of new lending criteria, products, and regulatory changes.

Regular communication with a vast network of lenders and financial institutions allows them to receive updates directly from the source. Additionally, brokers often subscribe to industry publications, online forums, and financial news platforms dedicated to real estate and financing trends. This multifaceted approach ensures that brokers deeply understand the current market, enabling them to offer their clients the most relevant and advantageous loan options.


Are there Brokers who specialise in residential vs. commercial bridging loans?

Yes, some bridging loan brokers specialise in residential bridging loans and some focus on commercial bridging loans. This is similar to lenders who also specialise in specific markets.

For brokers, the main reasons for specialising in residential vs. commercial are regulatory requirements, distinct borrower needs, and complexities associated with these two sectors.

Residential bridging loan brokers concentrate on properties intended for living, namely single-family homes, flats, apartments, and multi-unit buildings such as houses of multiple occupations such as Student Lets. Conversely, commercial bridging loan brokers focus on properties used for business purposes, such as offices, retail spaces, and industrial units, navigating commercial real estate's unique financial and regulatory considerations. These specialisations allow brokers to develop expertise in their respective areas, offering tailored advice, access to suitable lenders, and customised loan solutions that best fit the specific requirements and challenges of commercial or residential property transactions.


What’s the difference between a Regulated and an Unregulated Bridging Loan Broker?

Although the bridging loan sector is a niche category within finance, it has several further subcategories, such as regulated bridging loans and unregulated bridging loans. Whether a broker can help a borrower obtain a regulated or unregulated loan will depend on whether the broker or lender is authorised and regulated by the Financial Conduct Authority (FCA).

What's the FCA?

The FCA is the conduct regulator for around 51,000 financial services firms and financial markets in the UK, including the Bridging Loan market. It is tasked with protecting consumers, supervising those operating within the UK financial markets, enhancing market integrity, and enforcement. In the context of Bridging Loans, unregulated lending is not overseen by the FCA, whereas regulated lending is.

Financial Conduct Authority Website Screenshot

What is an Unregulated bridging loan?

An unregulated bridging loan is not subject to FCA regulation. However, it may still be subject to other regulations, such as those from the Office of Fair Trading (OFT) or the Financial Conduct Authority (FCA).

What is a Regulated bridging loan?

A regulated bridging loan is generally secured against a property that the borrower or their close family is or will reside in. Unregulated bridging finance cannot be secured against such property.

As you discuss your requirements with the broker, if you intend to secure the loan against your home, it's important to check with the broker in advance whether they can secure regulated finance. You can also search the FCA register for regulated companies. 


How are Bridging Loan Brokers paid?

Bridging loan brokers get paid for their services through a commission paid by the lender (Procuration Fee) or a fee paid by the borrower (Broker Fee)Brokers typically charge clients direct fees for consultation, application assistance, and brokerage services. These fees can be fixed amounts or percentages of the loan value, which are agreed upon upfront between the broker and the borrower.

How can a bridging broker offer 0% broker fees?

Bridging loan brokers must be paid for their services; otherwise, they cannot earn money. Where a broker offers 0% broker fees for a bridging loan, the only payment mechanism will be the Procurement Fee, which the lender will pay out of the arrangement fee charged to the borrower. The lender should clearly state how much of the lender Arrangement Fee is being given to the broker as a Procuration Fee.  

What is a lender's arrangement fee, and how does it work?

Lenders charge arrangement fees, typically 2% of the loan amount. Arrangement fees typically consist of a Facility Fee paid by the borrower to the lender and a Procurement Fee paid by the lender to the broker for introducing the business.

While it's typical for lenders to split the arrangement fee with the broker, some, all, or none of the lender's arrangement fee may be paid to the bridging loan broker upon completing the loan.

What is a Procuration Fee?

When a broker receives a portion of the lender's arrangement fee, whatever the sum, it is known as a Procurement Fee. This fee is paid for the business referral and used to cover a portion of the broker's expenses.

The combination of commissions from lenders and fees from borrowers ensures that brokers are compensated for their expertise in sourcing, negotiating, and securing the most suitable bridging finance solutions for their clients.


How should I choose a Bridging Loan Broker?

Borrowers choose bridging loan brokers because they can secure better terms through specialised market knowledge, access to the latest loan products, expertise in specific property sectors, and compensation via fees or commissions. 

How do I find a reliable bridging loan Broker?

Finding a reliable bridging loan broker involves conducting thorough research, seeking referrals, and evaluating credentials and experience. You can research potential brokers online by Googling “Bridging Loan Brokers” or visiting bridging loan broker and lender directories such as BridgingLoan.org.uk.

While many review websites, such as TrustPilot or Feefo, display customer reviews for bridging loan brokers, the legitimacy of those reviews has been questioned in the mainstream press, citing the potential for fraudulent reviews as a concern. The Government confirmed this problem when, in 2016, the Competition and Markets Authority (CMA) took action against an online marketing company that posted fake reviews on behalf of its clients. Several strategies can help you spot fake reviews. One approach is investigating whether the reviewer has posted reviews on other items or locations. Accounts often crafted solely for posting a single fake review won't have a diverse review history. If the reviewer does have numerous reviews for different products or venues, examine whether these reviews share an unusually positive tone, typically brief. 

Positive reviews and testimonials from previous clients can offer insight into a broker’s reliability and service quality. Networking within real estate and financial circles may provide personal referrals to trusted brokers known for their expertise and integrity. 

Membership in reputable financial or real estate associations indicates adherence to industry standards, another good measure of a broker’s legitimacy. Additionally, scheduling consultations with potential brokers can help assess their understanding of your financial needs, responsiveness, and the breadth of their lender network.

Ultimately, a reliable bridging loan broker should demonstrate a proven track record, transparent practices, and a commitment to securing the best outcomes for their clients.

Is speaking with a Bridging Loan Broker free?

Yes, the initial call (discovery call), with a broker is free and should be offered without obliging the borrower to use their services. When a borrower is considering taking out a bridging loan, they should consult with a bridging loan broker first, as their advice and information will be given without any obligation to proceed with their services. Most reputable brokers will also offer you a full proposal detailing all the costs and fees without charging an upfront fee. 


What questions should I ask when interviewing potential Brokers?

When interviewing potential bridging loan brokers, it's crucial to ask questions that assess their expertise, experience, and suitability for your specific needs. After explaining your situation and requirements, key questions will help you assess whether they’re right for you.

6 Key questions to ask your bridging loan broker

  1. What experience do you have with bridging loans, and how long have you been working in bridging?
  2. Can you provide recent examples of past bridging loans you've secured and the terms achieved?
  3. How do you get paid, and what is your service cost?
  4. What is your process for finding and securing a loan, and how do you tailor this process to meet my needs?
  5. How extensive is your network of lenders, and do you have experience with loans for properties like mine?
  6. Can you provide references from previous clients?

Additional questions you could ask a broker.

  • Are you a whole market broker?
  • Do you arrange regulated or unregulated loans?
  • How long does a bridging loan take to approve in principle?
  • How long does a bridging loan take to complete?
  • What are the criteria for a bridging loan?
  • What is the average interest rate on a bridge loan?
  • What is the likely interest on my bridging loan?
  • Do you charge an arrangement fee? If so, how much is it, and how is it structured?
  • Do you charge an application fee? If so, how much is it, and how is it structured?
  • Will I need a solicitor for a bridging loan, or can you provide dual representation?
  • Will I need the services of an independent financial advisor to complete this loan?
  • Do you need to complete an in-person valuation for the bridging loan, or will it be a desktop valuation?
  • What issues do you anticipate in my obtaining this bridging loan?

These questions aim to thoroughly understand the broker's qualifications, approach, and ability to deliver the desired results.


Are there any red flags to watch out for in a Bridging Loan Broker?

When evaluating bridging loan brokers, several red flags may indicate a broker might not be the best fit for your needs.

These include a lack of transparency about fees and commissions, suggesting hidden costs could arise. Limited knowledge of the bridging loan market or an inability to explain loan terms and conditions clearly shows a lack of expertise. A small network of lenders or an unwillingness to explore multiple lending options may limit your access to the best loan terms. High-pressure sales tactics or pushing for quick decisions without adequate time for consideration can indicate a focus on their commission rather than your best interests. Lack of membership to industry organisations or professional credentials suggests they may not adhere to regulatory standards. Lastly, poor communication or responsiveness during initial interactions can foreshadow future service issues. Recognising these warning signs can help you select a reputable and reliable broker who aligns with your financial goals.


What qualifications should a reputable Bridging Loan Broker have?

A reputable bridging loan broker should possess practical experience and formal qualifications and be accredited by organisations in the financial sector, particularly in lending and real estate. Qualifications include a degree in finance, economics, or a related field, along with certifications specific to financial advising or mortgage brokering, depending on the regulatory requirements of their services. It is worth noting that the only regulated activities are overseen by the Financial Conduct Authority (FCA), so brokers who solely arrange commercial finance are not required to be regulated by the FCA. 

The most popular qualifications for finance brokers

  • Certificate in Mortgage Advice and Practice (CeMAP) 
  • CeMAP Diploma Certificate in Regulated Equity Release (CeRER) 
  • Certificate in Protection (CertPro) 
  • Certified Practitioner in Specialist Property Finance (CPSP) 
  • UK Financial Regulation (UKFR)
  • Diploma for Financial Advisers (DipFA)
  • Certificate for Documentary Credit Specialists
  • BSc (Hons) Banking & Finance
  • BSc (Hons) Finance Investment & Risk
  • Certificate in Financial Studies (CeFS)
  • Lessons in Financial Education (LiFE)

Whilst certification is not compulsory for unregulated financial services, being accredited will demonstrate to borrowers that the broker is aware of and, therefore, more likely to adhere to industry best practices. Beyond academic credentials, a broker should have a solid track record of successful loan arrangements, demonstrating their expertise in negotiating and securing optimal loan terms for clients.


Should my Broker have specific memberships or regulatory oversight?

Yes, your broker should have specific memberships to reputable professional bodies relevant to the financial and real estate sectors. However, it should be understood that there is no regulatory requirement for oversight of commercial bridging finance. Several typical memberships and registrations are listed below.

Memberships and regulatory bodies for Bridging Loans

  • The Financial Intermediary and Broker Association (FIBA)
  • Information Commissioner's Office (ICO)
  • Financial Conduct Authority (FCA) 

These memberships and statuses signify a broker's commitment to adhering to industry standards, ethical practices, and continuing professional development. They provide a layer of trust and credibility, ensuring the broker is knowledgeable, competent, and up-to-date with the latest market trends, regulations, and best practices. Common examples include being licensed by a financial regulatory authority and memberships in mortgage brokering, financial advising, or real estate associations. Such credentials affirm the broker's professionalism and expertise and offer clients recourse through professional bodies in case of disputes or malpractice.


How important is local market knowledge for a Bridging Loan Broker?

Local market knowledge is critical for a bridging loan broker, as it significantly improves the broker's ability to provide tailored, effective advice and secure the best loan terms for clients. Understanding the nuances of the local real estate market, including property values, demand trends, and regional lending criteria, allows brokers to accurately assess loan viability, negotiate competitive rates, and identify the most suitable lenders for specific projects.

A broker's local market knowledge is a key determinant of their ability to deliver bespoke financing solutions that meet clients' needs effectively.

This expertise is particularly valuable in navigating complex transactions and advising clients to make informed decisions that align with local market conditions. Furthermore, a broker's familiarity with local regulations and legal requirements ensures that loan arrangements comply with all pertinent laws, minimising potential risks and delays in the loan process. 


What should I expect in terms of communication and service from my Broker?

From your bridging loan broker, you should expect clear, timely, and proactive communication alongside comprehensive service throughout the loan process. This includes regular updates on your loan application status by phone, SMS and email, prompt responses to your enquiries, and transparent discussions about potential options and any challenges that arise promptly. A reputable broker will guide you through the application and negotiation phases and provide expert advice tailored to your financial circumstances.

The service provided by a bridging loan broker should encompass a thorough assessment of your needs, a diligent search for the most suitable loan products, creating competition amongst lenders for your deal, assistance with paperwork and legal requirements, and negotiation of the best possible terms on your behalf. Additionally, after securing the loan, continued support or advice regarding repayment strategies or refinancing options should be available, ensuring you feel informed and supported from start to finish.

The Process of Working with a Bridging Loan Broker

Working with a bridging loan broker typically involves several steps for a borrower; however, the broker's process is more detailed. Understanding a bridging loan broker's role behind the scenes can help you better gauge timescales and their responsiveness to your questions.

We’ve listed the steps below.

  1. Discovery Call. The Broker and borrower discuss requirements and determine whether a bridging loan is suitable. This call typically lasts up to 15 minutes.
  2. Proposal. During the call or shortly afterwards, the borrower will receive a loan proposal by email for them to review. The proposal will detail all the costs and fees associated with the loan.
  3. Follow-up Call. The broker will call the borrower to determine whether they wish to proceed with the loan. This is also an opportunity for the borrower to ask any questions. If the borrower is happy with the offer, they can apply. The two parties will then agree on a mutually convenient date and time for the application call, and this could be an extension of the follow-up call if the financing is urgent. The follow-up call typically lasts 5 minutes, depending on the borrower's questions. 
  4. Application Call. The broker will call the borrower and ask questions to draft the application form. This call usually takes 15 minutes. The borrower will then receive a welcome pack which includes the following:
    • Application form for the borrower to review, sign and return.
    • A list of all documents the broker will require to progress the application.
  5. Agreements in Principle (AiP). The broker will now review the loan profile vs. their lender network and present the requirements to multiple lenders who they believe will want the loan. Each lender will offer an AiP, and the broker will present those to the borrower. The borrower will choose the AiP that best meets their needs, and the broker will liaise with the lender to progress the application by imparting all the pertinent information they hold for the borrower to the lender.
  6. Valuation. The lender will appoint a valuer/surveyor to determine the market value of any properties used as collateral for the loan. Sometimes, an in-person valuation is not required, but an Automated Valuation Model (AMV) is instead used. When the valuation report is returned, the lender will confirm that the loan may proceed on the original terms issued, or they may change the terms if the report indicates that the market value of the collateral is less than expected or in a poorer condition than expected.
  7. Lender Due Diligence. The lender will complete all legal and due diligence and may raise further questions that arise from this process, such as requiring additional documentation. The broker will liaise with the borrower to ensure the documentation is completed and questions answered. 
  8. Contracts. The lender will issue a contract for the loan and, when the contract is signed, take charge of the collateral.
  9. Funds Released. The last step is for the lender to release the funds to the borrower’s solicitor or, in some cases, directly to the borrower.

What information will a Broker need from me?

Applicants must provide comprehensive personal and financial information to apply for bridging finance. This includes personal details like name, residential address, length of stay, residential status, National Insurance number, employment details (including job title, nature of work, length of employment, annual and additional income), family details (dependent children and their ages), date of birth, nationality, marital status, and contact information.

Loan specifics required are the amount, term, charge order on the property, any time constraints, borrowing purpose, and exit strategy. Property collateral details must cover address, type, rental income, bedroom count, market value, existing borrowings, equity held, property description, and usage history. Also, legal and accounting representatives' contact information and a credit report are necessary when applying for a bridging loan. 


Can I work with multiple Brokers at the same time?

Yes, you can work with multiple bridging loan brokers simultaneously, but it's important to consider the implications and logistics of doing so.

Working with several brokers might increase your access to a wider range of loan products and potentially secure more competitive terms, as each broker may have unique lender relationships and expertise. However, it might also create deal fatigue with lenders as it's likely both brokers, to a degree, will be pitching your deal to some of the same lenders. Whilst this might not sound like a problem, the issue arises when a lender dismisses your application because “they’ve already seen it and rejected it' –even when the loan has materially changed. 

For example, if a borrower originally asked for a £450,000 loan with broker one against a vanilla residential property with an anticipated market value of £650,000. Yet, after a valuation, the report returns at a market value of £500,000. This would mean the loan-to-ratio (LTV) has skyrocketed from a comfortable 69% LTV to a deal-breaking 90%. There’s not enough equity in the property for the lender. Let’s now say that the second broker approached the deal differently and advised the borrower to use a second property as collateral to bring the overall LTV of the collateral down and make the loan workable or achieve better terms. If broker two puts that loan to the same lender as broker 1, even though the loan is materially different, it is unlikely that the lender will prioritise reviewing the loan proposal. Now, imagine this has happened several times with the same lender, with slight variations and amendments to the same loan. It costs time and, therefore, money for the lender to review the loan proposal to understand whether it works. If the lender is communicating with two separate brokers about the same deal, it becomes challenging to manage, which can lead to frustration on the part of the lender. 

We recommend using just a single broker, but if you want to use multiple brokers, be upfront with them and ensure your communication is clear, methodical and organised to avoid overlapping efforts and potential confusion among lenders, which could negatively impact your loan application. Additionally, be mindful of any exclusive agreements or fee structures that could be in place with each broker, as these could affect your financial obligations.

Even if you don’t have exclusivity clauses with your brokers, consider how it will affect their motivation to source your loan. As brokers receive a commission, accounting for the majority if not all of their fees when the loan is completed, if there’s an increased probability that the loan may get placed by another broker, they will effectively lose their payment for their services.

Ultimately, while employing multiple brokers is feasible, it is best avoided to ensure you receive the most attentive service from your broker, thus securing a fast completion at the best rate and terms.


How do I know if a Broker's fee structure is fair?

Determining the fairness of a broker's fee structure involves comparing it against industry standards, understanding the services provided, and evaluating the value the broker adds.

Start by researching typical fee ranges for bridging loan brokers, which can vary based on the complexity of your loan but are typically charged at 1-2% of the loan amount and the level of service offered. A fair fee structure should be transparent, with all costs clearly outlined upfront, including any commission from lenders. Assess the services' comprehensiveness, such as loan sourcing, negotiation, and application assistance, against the fees charged. Consider consulting with multiple brokers to compare fee structures and services offered. Additionally, feedback from past clients can offer insights into the broker's effectiveness and whether their fees are justified by the quality of service and loan terms secured.

A broker's fee is considered fair if it aligns with market rates while reflecting the value and expertise they bring to your financial situation.


Conclusion: Is a Bridging Loan Broker right for me?

Bridging loans are a vital resource for those needing fast, high-value funding and bridging loan brokers are instrumental in connecting you with the optimal lending solutions. From untangling the complexities of financing options to securing deals with favourable terms, brokers are the linchpin for bridging the gap in your immediate funding needs.

Whether a bridging loan broker is right for you must ultimately be decided by you. A broker’s expertise, however, in navigating the intricate bridging loan landscape ensures you not only secure the necessary funds but also do so under conditions that align with your financial strategy and timelines.  


We’re a Bridging Loan Broker ready to help.

We're financial experts who arrange short-term bridging loans for property owners, securing you the best rates and terms from our extensive network of bridging loan lenders, including Private Investors, Family Offices, Private Equity firms and Institutional Lenders.

Get expert assistance today – we're here to answer any questions about bridging loans.

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