Bridging Loans for Construction Companies

A bridging loan for a construction company is almost always a first-charge loan against a site or existing property, drawn as a lump sum, with interest rolled up so there are no monthly payments eating into your cash flow. The exit is what the lender actually underwrites: development finance once planning is granted, a commercial mortgage once the asset is stabilised, or proceeds from a sale. Get the exit wrong and the deal stalls, no matter how clean the security.

The use case we see most is a contractor or developer who has found a site, needs to exchange in days rather than weeks, and cannot wait for a development lender to run its full credit process. A bridging lender can put first-charge security in place and draw funds in roughly five to fifteen working days. That speed costs money: rates on construction bridging typically run from 0.7% to 1.2% per month, which over a six-month hold adds up, so the numbers have to work before you start.

LTV is the other lever. Most bridging lenders will go to 65-70% of the open-market value of the security on day one. If you are buying land with planning potential but no consent yet, expect the lender to value it on its current agricultural or commercial use, not the hope value, which can make the advance feel conservative. The lenders who will stretch further on construction security are not the high street names; they are the specialist short-term lenders we place with regularly, and their appetite moves deal by deal.

We are a broker, not a lender, and we are direct about it: no broker can promise you a rate or a decision before a lender has seen the deal. What we do is put the deal in front of the right lender the first time, rather than shopping it around and leaving a trail of soft searches.