How do bridging loans in Scotland work?

Bridging loans are ideal for anyone who’s selling a property and planning on using that money to buy a new one – particularly in a difficult situation where they don’t have the collateral as early as they would like.

How can you get a bridging loan in Scotland?

The good news is that getting a Scottish bridging loan doesn’t have to be too much of a complex process. In fact, you may find that it can often be fairly straightforward and have more flexible criteria than most mortgage lenders typically require.

Bridging Loans in Scotland & Finance Options

If you’re searching for a bridging loan to support your property purchase in Scotland, but you’re unsure of what your next steps should be, this page could provide you with the answers you’re looking for.

Bridging finance is a great option when securing property in Scotland or developing an existing site. There’s a need for urgency for commercial ventures like this, and that’s why bridging finance is so popular.

What is a bridging loan?

Securing a bridging loan can be a great way of obtaining fast and flexible finance. Typically offered to property developers, landlords, or homebuyers, they “bridge” the financial gap between selling your current property and buying a new one.

Property developers and landlords typically use bridging loans because arranging a traditional mortgage or property loan through a traditional lender can be time-consuming.

Standard mortgages can sometimes take months to complete, and the bank may take days or weeks just to potentially reject your application by the end, which means even more wasted time. A bridging loan could be a great alternative when you’d rather avoid all the fuss and access cash quickly.

Bridging loans are usually repaid with a robust exit strategy — you might repay by moving over to a self-build mortgage, by selling your property for a profit, or remortgaging.

You can secure your bridging loan against both commercial or residential properties in Scotland, as well as building plots or land, even before planning permission is granted.

Suggested reading: Can I use a bridging loan to buy land?

How do bridging loans work in Scotland?

It can be challenging to obtain bridging loans in Scotland, mainly due to the differences in property law compared to the rest of the UK. This can be especially true when approaching a traditional high street lender.

If you’re looking for a bridging loan in Scotland, it’s possible that you’ll find fewer lenders operating in the country, and the ones who do may only work in specific locations.

If you’re operating in Scotland, applying for an unregulated bridging loan (for commercial purposes) could be your best choice. However, we’d recommend taking expert advice before completing your application to get the best results and help the process run smoothly.

Scroll down for a shortlist of lenders that offer bridging loans in Scotland.

Bridging loans for homebuyers in Scotland

There are many different ways in which bridging loans can help property buyers in Scotland.

Here are just a few possibilities:

If you want to purchase a new property but are waiting on the sale of your current property to complete, you can gain swift access to the money needed to secure your new property.
Self-build conservation and renovation projects can be hard to fund. The option to ‘roll up’ the interest on a bridging loan may provide an attractive alternative for self-build projects, avoiding monthly interest payments that you can spend on your build.
You’ll often need to pay a 10% deposit to clinch a property at auction. Having the help of a bridging loan will allow you to acquire the property while you secure the rest of the cash.

What else can I use my bridging loan for?

Besides buying property, there are plenty of ways in which you can use bridging finance:

Business financing – you can use your bridging loan to cover short-term start-up or business costs as well as taxes when you can’t raise the lump sum needed without help.
Development financing – securing a bridging loan could be a great solution if you are considering buying a derelict property and attempting to renovate and flip it.
Land purchase – in some cases, you can use a bridging loan if you need help buying land that is not intended for property development, whether for personal or commercial use.

Bridging loan companies operating in Scotland

Here at BLD, we work closely with several trusted bridging loan lenders who operate in Scotland. We’ve provided a shortlist of these companies below. Read on to find out more about each company.

Alternative Bridging Corporation

Alternative Bridging Corporation is a bridging and development finance lender, providing residential and commercial loans on a first or second charge basis.

With a 30-year track record, Alternative Bridging Corporation has an experienced and dedicated team of property finance professionals who have a first-hand understanding of what intermediaries and their clients need from a lender in this market.

Find out more about Alternative Bridging Corporation

Ortus Secured Finance

Established in 2013, Ortus Secured Finance can offer anything from £100k for a standard bridging loan, to £25m for a commercial loan. With offices in Glasgow, their local market knowledge and physical presence can mean quick decisions.

Find out more about Ortus Secured Finance.

Hope Capital

Whether you’re looking to purchase or refurbish residential, commercial property or fund purchasing land, Hope Capital can provide finance for almost any purpose, providing loans from £50k to £5m.

Also, if you have poor repayment history, Hope Capital are willing to consider applications from those with adverse credit history.

Find out more about Hope Capital

TFG Capital

Established in 2014, provides companies and property professionals with a direct route to no nonsense bridging finance with lending decisions based solely on the security value.

Find out more about TFG Capital

Fiduciam

Recently launching a specialised team to work on projects in Scotland, Fiduciam are backed by a significant funding pool and dedicated shareholders. They are an institutionally funded and pension-fund owned provider of bridging loan lenders who look to support SMEs with their borrowing. Fiduciam promise low-interest rates on typical loans between £250k and £25m.

Find out more about Fiduciam.

Roma Finance

Roma Finance has provided a quality service for the past ten years, offering bridging finance ranging from £75k to £3m across England, Wales, and Scotland.

Based on the consistency in decision and security involved in the project, they offer Bridge to Term options for both commercial and residential properties.

Find out more about Roma Finance

Assetz Capital

Providing bridging finance across the UK, including Scotland, Assetz Capital accepts applications from limited companies, limited liability partnerships, sole traders, and partnerships, offering loans ranging from £150k to £5m.

Find out more about Assetz Capital.

Shawbrook Bank

Shawbrook Bank will provide up to 24-month terms on a 75% Loan to Value, lending from £50k to £15m. They offer bridging finance to support everything from quick refurbishments, specialist buy-to-let, and complex commercial investments, including serviced offices and multi-unit lets.

Find out more about Shawbrook Bank

How to arrange bridging finance in Scotland

We hope you’ve gained a little more knowledge about bridging loans in Scotland.

But remember, not all lenders are equal, so finding one that suits you best is essential. We always recommend speaking with a few different lenders to get the best possible deal on your bridging loan in Scotland.

If you would like help calculating fees, use our bridging loan calculator.