Bridging Finance
Bridging finance provides short-term funding to bridge a gap between two transactions. This is commonly used where timing does not align, such as purchasing a property before an existing asset is sold or refinancing into longer-term funding.
Traditional lending is not always suited to these scenarios, particularly where the exit depends on a future sale or refinance. Bridging finance is typically structured around the asset and the planned exit - rather than long-term servicing alone.
At Vive Capital, we help structure bridging finance for property purchases, transitional funding and time-sensitive opportunities.
How bridging finance works
Bridging finance is usually designed as a short-term facility with a defined exit strategy. The loan is typically repaid once a property is sold, refinanced or longer-term funding is arranged.
Lenders generally focus on the available equity across the transaction and the strength of the exit. This may include the value of an existing property, the asset being purchased or a combination of securities.
These facilities are commonly interest-only, with interest often capitalised as part of the structure. Borrowers are typically expected to have sufficient equity to cover interest, fees and potential delays in the exit.
Bridging finance may be structured as either open or closed.
Closed bridging is where the exit is clearly defined, such as an unconditional sale of an existing property.
Open bridging is where the exit is planned but not yet confirmed, such as selling a property or refinancing at a later stage.
Closed bridging is typically viewed as lower risk, while open bridging may require stronger equity and buffer within the structure.
What lenders typically look at
When assessing bridging finance, lenders usually consider the value of the security properties, the level of equity and the proposed exit.
They will also review the expected timeline, marketability of the property being sold and whether there is sufficient buffer to cover interest and costs. A clear exit strategy is one of the most important factors in bridging finance.
Talk to us early - when to consider bridging finance
It’s best to review bridging finance early, particularly where timing between transactions is uncertain. This allows the structure, equity position and exit strategy to be assessed before commitments are made.
We can help when you're considering purchasing before selling, negotiating a time-sensitive opportunity, refinancing between lenders or requiring short-term transitional funding.
Early planning often provides more flexibility and helps avoid delays.
Discuss your project
If you're considering a purchase before selling, or require short-term funding between transactions, we can help structure bridging finance around the asset and exit strategy.