Unregulated Bridging Loans

An unregulated bridging loan simply means that a lender will not lend against someone’s primary residence or family home where they are currently living. 

Of all the bridging loans that are funded in the UK, around 50% of loans are regulated and 50% are unregulated activity. 

Unregulated bridging finance is ideally used for flipping properties for a profit or buying a property to fix up and rent out to tenants – and later refinancing to a buy to let mortgage.

Unregulated lenders typically have far few restrictions than regulated lenders and traditional mortgages – and can usually be more flexible with terms and time sensitive property purchases.

As an independent private bridging lender, we have the ability to make fast decisions and complete within 2 weeks.

With more than 30 years of experience in the property industry across the UK, we understand the need for quick completion and can offer fast funding through our personal connections with family offices and high net worth private individuals.

Based in the heart of London, we have great accessibility to different partners and locations and will be delighted to assist with your funding requirements.

Whilst being unregulated might seem scary or ominous, it just simply means that they cannot lend against an individual’s main house of residence. It also means that unregulated bridging lenders can be more flexible with their terms, provide faster decisions and execute funding quicker.

Any regulated bridging activity is subject to rules by the Financial Conduct Authority (FCA) and therefore any application follows stricter rules in terms of checks being carried out, rates charged and terms of the loan.

Understandably, if someone is using a bridging loan against their own family home, you would expect some regulation in place to protect consumers from losing this home.

Property Development – Unregulated bridging loans are most commonly used by property developers and investors to buy properties under a tight deadline. The use of bridging finance allows people to become cash buyers so they can move on opportunities quicker and this funding is ideal for anyone looking to carry out upgrades, refurbishments and renovations for both residential and commercial property.

Bridge to Let – Customers use unregulated bridging finance to buy a property or HMO that can be rented out to tenants and later refinanced on a buy to let mortgage.

Auction Finance – When buying a property at an auction, you require 28 days to pay the full amount or risk losing the opportunity. Flexible funding can provide you with the necessary capital in 1 to 2 weeks.

Investment Opportunities – Investors are the most common customers of bridging, with the ability to avoid property chains and delays with a quick turnaround on property purchases.

Business Loans – Bridging is not only used for property, since it is simply another way to free up some capital and cash. Currently it is used by firms looking to purchase machinery, buy new business premises or even pay tax bills.

Lenders generally carry out credit checks, however, the decision to proceed with the loan is based on factors such as:

• The condition and value of the property
• The opportunity and future growth of the property
• The customer’s background and track record
• The proposed plan, attention to costs and detail
• The exit plan

Unregulated bridging lenders are willing to consider bad credit and take a view on adverse credit histories.

We work with bridging loan brokers across the UK on unregulated activity – so if you have any clients or deals that you have received or put together, we would be delighted to discuss further with you and see if we can provide a flexible funding solution.

Blue Square Capital offers rates starting from 0.95% per month which remains fixed through the loan term of up to 15 months.

Other costs to be aware of include:

• Arrangement fees (2% of loan amount)
• Bank transfer fee (£25)
• Admin fee (£999)
• Valuation and survey fees (depends on property)
• Solicitor fees (depends on project)
• Exit fees (n/a)

Do I Need To Be A Limited Company To Be Approved?

No, you do not need to be a limited company to be approved for a loan with Blue Square Capital since we work with all types of businesses and applicants. 

Is My Property At Risk?

Yes, when using a bridging loan, this is a type of secured finance and the property in question will be used as security and can be at risk of repossession if your loan repayments are not met as agreed.

How Long Can I Take To Be Approved and Funded?

Our team of advisors are able to use automated valuations and processes to make quick decisions and this can result in an initial quote within 24 hours. 

Although subject to the complexity of each case, we have successfully completed a number of deals within 2 weeks and always aim to complete and transfer funds as quickly as possible.

Can I Get a Bridging Loan With Bad Credit?

Yes, it is certainly possible to be considered for a bridging loan with bad credit. The value of the property and the opportunity you have presented can be used to determine your eligibility and not your credit past.