What does a bridging lender look for in a deal?
Original Article by: Bridging Loan Directory
Bridging lenders are known for flexibility and speed.
But that doesn’t mean every deal gets approved, and in the current market, lenders are placing greater emphasis on structure, clarity and exit planning.
Behind every decision is a clear set of criteria lenders use to assess risk and determine whether a loan is viable. Understanding what lenders are looking for can help improve your chances of approval and speed up the process.
The key factors lenders assess
1. Exit strategy
The exit strategy is one of the most important parts of any bridging loan.
Lenders want to know how the loan will be repaid at the end of the term.
Common exit strategies include:
sale of the property
refinancing onto a longer-term mortgage
sale of another asset
A clear, realistic exit strategy gives lenders confidence in the deal.
In many cases, the strength of the exit is now one of the primary factors determining whether a deal proceeds.
2. The property
The property itself is central to the decision.
Lenders will consider:
property type (residential, commercial, mixed-use)
condition of the asset
location
marketability
More complex or unusual properties may still be accepted, but they can require more detailed assessment.
This is particularly relevant where the property impacts the ease and timing of the exit.
3. Loan-to-value (LTV)
LTV is a key measure of risk.
Lower LTV deals are generally lower risk and easier to approve, while higher LTV deals require stronger supporting factors.
Lenders will look at how much equity is in the deal and how protected they are if the exit doesn’t go to plan.
Higher LTV deals may still be possible, but typically require stronger supporting factors across the rest of the case.
4. Borrower profile
Lenders assess the borrower’s experience and financial position.
This can include:
track record in property or development
credit history
financial stability
Experienced borrowers with a clear plan are often viewed more favourably.
In more complex or structured transactions, borrower experience can play a greater role in lender confidence.
5. Valuation
The valuation supports the lender’s understanding of the asset and its value.
The type of valuation used will depend on the deal and the lender’s criteria.
6. Legal structure
The legal setup of the deal can also impact how quickly it progresses.
This includes:
ownership structure
title clarity
any existing charges or restrictions
Working with experienced solicitors can help ensure the process runs smoothly.
7. Timescales
Bridging loans are often time-sensitive.
Lenders will consider whether the proposed timeline is realistic and whether all parties involved can move quickly enough to meet it.
Unrealistic timelines can lead to delays or additional scrutiny during the underwriting process.
What makes a deal more attractive?
Deals are more likely to be approved quickly when they have:
a clear and credible exit strategy
a straightforward property
a well-structured proposal
experienced borrowers
aligned professionals supporting the deal
Deals that combine these elements are typically easier to progress and less likely to encounter issues during the process.
Common reasons deals are declined
Even in a flexible market, some deals don’t proceed.
This can be due to:
weak or unclear exit strategy
overvalued property
complex or high-risk structures
lack of supporting information
Understanding these risks early can help avoid wasted time.
In many cases, these issues only become clear during underwriting, which can slow down or prevent a deal from progressing.
The role of brokers and partners
A well-packaged deal makes a significant difference.
Experienced brokers and partners can help:
structure the deal correctly
present information clearly
match the deal to the right lender
This can improve both approval rates and speed.
A well-packaged deal makes a significant difference.
As deals become more structured, the role of brokers and professional partners in presenting and managing the case is increasingly important.
