What is an Adverse Credit Bridging Loan?

What is an Adverse Credit Bridging Loan?

An adverse credit bridging loan is a short-term, property-backed loan designed for borrowers who may not meet traditional lending criteria due to their credit history. Unlike many banks and mainstream lenders, alternative lenders can take a more flexible approach, looking beyond credit scores to assess the overall strength of the deal.

At Somo, lending decisions are primarily based on the value of the security property and the proposed exit strategy. This means borrowers with CCJs, defaults, missed payments, IVAs, CVAs, bankruptcy or other credit issues may still be able to access funding when traditional finance isn't available.

Key features:

• Asset-led decision-making: Lending is primarily based on property value and available equity, not the borrowers credit file.

• Underwriting driven by the exit strategy: The exit strategy is central to the underwriting - for example sale or refinance.

• Credit file considered: The credit file will always be reviewed but does not need to be perfect to be considered.

Who is an Adverse Credit Bridging Loan For?

Adverse credit bridging loans can be suitable for a wide range of borrowers, including:

• Property investors

• Landlords

• Developers

• Business owners

• Self-employed individuals

• Borrowers refinancing existing debt

• Clients facing urgent deadlines or time-sensitive opportunities

Whether the adverse credit is historic or more recent, every case is assessed individually. Rather than relying solely on automated credit scoring, Somo considers the circumstances behind the credit profile, the security available and the proposed repayment strategy.

Why Was I Rejected Somewhere Else?

Many mainstream banks and traditional lenders operate within strict lending criteria and automated credit-scoring systems. As a result, applications can be declined for reasons that don't necessarily reflect the strength of the overall transaction.

Common reasons for rejection include:

• Low credit scores

• Historic or recent CCJs

• Defaults or missed payments

• Mortgage arrears

• IVAs or CVAs

• Bankruptcy or insolvency

• Complex income structures

• Self-employed income

• Unusual properties

• Time-sensitive transactions

At Somo, we take a more practical view. Our experienced underwriters assess each case on its own merits, focusing on the value of the security property and the viability of the exit strategy rather than a single credit score.

Bad Credit Bridging Loan Rates, LTV and Fees

Annual interest from 1.15% pm

Up to 70% LTV

Borrow from £27.5k - £3m

Every adverse credit bridging loan is assessed individually, with rates and terms tailored to the specific circumstances of the case.

Key factors include:

• Property type

• Loan size

• Loan-to-value ratio

• Exit strategy

• Overall deal structure

• Credit profile and circumstances

Unlike many traditional lenders, adverse credit does not automatically exclude a borrower from consideration. Our team will review the full circumstances of the transaction to determine the most appropriate loan amount, interest rate and LTV.

How Quickly Can a Bad Credit Bridging Loan Complete?

Speed is often one of the main reasons borrowers choose bridging finance.

Somo can provide an initial lending decision in as little as 30 minutes, helping borrowers understand their options quickly. Completion times vary depending on the complexity of the case, valuation requirements and legal process, but our streamlined underwriting and experienced legal partners help keep transactions moving efficiently.

Where suitable, AVM-backed assessments may be available to further accelerate the process.

Common Uses for Bad Credit Bridging Loans

Adverse credit bridging finance can support a wide variety of scenarios, including:

• Refinancing Existing Borrowing

• Replace an existing bridge, private loan or other short-term facility approaching maturity.

• Auction Purchases

• Secure auction properties within strict completion deadlines.

• Preventing Repossession

• Raise capital quickly to address urgent financial pressures and protect property assets.

• Property Refurbishment

• Fund refurbishment projects where traditional lenders may be unwilling to lend.

• Capital Raising

• Release equity from residential, commercial or semi-commercial property.

• Tax Liabilities

• Address outstanding tax obligations where fast access to capital is required.

• Below Market Value Purchases

• Move quickly on discounted property opportunities from motivated sellers, auctions or off-market transactions.

What We Need to Assess a Bad Credit Bridging Loan

One of the advantages of bridging finance is the straightforward application process.

To assess a case, we will typically require:

• Details of the security property

• The loan amount required

• The purpose of the loan

• Details of the proposed exit strategy

• Information relating to any existing borrowing secured against the property

Income verification and affordability assessments are not typically required under our Valuation Only™ product, helping to simplify the process for borrowers with complex circumstances.

Case Studies

Case study links to adverse credit loans:

Frequently Asked Questions

How Much Can I Borrow?

Loans are available from £27,500 to £3 million, with borrowing levels determined by the property's value, loan structure and overall strength of the case.

Is Proof of Income Required?

Not typically. Our Valuation Only™ product is designed for borrowers who may not be able to evidence income in the traditional way or simply prefer not to.

Do You Do Credit Checks?

Yes. Credit checks may form part of the assessment process; however, adverse credit does not automatically result in a decline. Unlike many traditional lenders, we consider the wider circumstances of the case, including the security property and proposed exit strategy.

What Property Types Do You Accept?

We lend against a wide range of property types, including residential, commercial and semi-commercial assets.

Can I Get a Bridging Loan with CCJs, Defaults or an IVA?

Yes. We regularly consider applications involving CCJs, defaults, missed payments, IVAs, CVAs and other adverse credit events. Every case is assessed individually, and a poor credit history does not necessarily prevent access to funding.

What Credit Problems Do You Accept?

We can consider borrowers with:

• CCJs

• Defaults

• Missed payments

• Mortgage arrears

• IVAs

• CVAs

• Bankruptcy

• Insolvency

• Complex credit histories

Every application is reviewed individually by an experienced underwriter.

Can I Get a Bridging Loan After Bankruptcy?

Potentially. Applications involving historic or discharged bankruptcy may be considered, subject to the circumstances of the case, available security and exit strategy.