Your Guide to Joint Bridging Loans

Joint bridging loans offer a unique solution for partners, family members, or investors to access short-term funding together, potentially unlocking bigger opportunities.

Read on to see how this could benefit you.

Whether you’re a couple buying an investment property, business partners securing commercial property, or a group of investors funding a development project, joint bridging loans can provide the flexibility and speed you need.

In this guide, we’ll explore how joint bridging loans work, their benefits and potential drawbacks, and help you decide if this shared finance option is right for your property goals.


What Are Joint Bridging Loans?

Joint bridging loans are short-term secured loans designed for two or more individuals or entities to borrow together.

These shared financial arrangements allow multiple parties to combine their resources and take on collective responsibility for the loan.

This type of finance is particularly useful when a single borrower might not qualify for the required amount or when sharing the cost and risk of a property venture is beneficial.


How Does a Bridging Loan Work?

Bridging loans are short-term financing solutions designed to cover a temporary gap in funding, and are mostly used for property transactions.

They work by providing quick access to capital, usually for a period of 1 to 36 months. The loan is secured against property or land, with the lender taking a legal charge over the asset.

When you apply for a bridging loan, the lender primarily focuses on the value of the property being used as security and your exit strategy – how you plan to repay the loan. This differs from traditional mortgages, which place more emphasis on your income and credit history.

Loans typically offer LTV ratios up to 75-80% of the property’s value. Some lenders may go higher with additional security and 100% LTV loans are also a possibility. The exact LTV will depend on the lender’s assessment of the application and the proposed exit strategy.

Interest on bridging loans is charged monthly, and at higher rates than standard mortgages due to their short-term nature and increased risk for lenders. Most borrowers choose to ‘roll up’ the interest, paying it along with the principal at the end of the loan term.

Joint liability

By being part of a joint loan you are all jointly liable for the debt and interest due.

Let’s talk bridging loans!

Book your free consultation today and let’s discuss how we can help you achieve your property goals.


Who Can Apply for a Joint Bridging Loan?

Couples and Family Members

Married couples, partners, siblings, or parents and children often use joint bridging loans to purchase property together.

Business Partners

Co-owners of companies or individuals embarking on joint business ventures frequently turn to joint bridging loans. This option allows them to secure short-term finance for commercial property purchases or to fund time-sensitive business opportunities.

Property Investors and Developers

Groups of investors or development teams may opt for joint bridging loans to fund large-scale projects or to quickly secure properties with potential for renovation and resale.

Companies, trusts and SPVs

Bridging finance is also available to companies and other legal entities. So your own business could apply for a bridge loan. Or a newly created Special Purpose Vehicle (SPV) could apply. Lenders are extremely flexible, as long as the basic numbers add up and the exit is strong.


Common Uses for Joint Bridging Loans

A short-term loan can be used for so many different reasons and scenarios. While they are still predominantly used for property purchase and breaking property chains, the other uses are almost limitless.

Breaking Property Chains

When selling one property and buying another, timing doesn’t always align perfectly. Joint bridging loans can provide the necessary funds to complete a purchase before the sale of an existing property, preventing chain collapses.

Read more: How a chain break bridging loan could help you to move house

Auction Purchases

Property auctions often require quick completion times. Joint auction finance can offer the speed and flexibility needed to secure auction properties, allowing buyers to meet tight deadlines.

Property Refurbishment Projects

Partners undertaking renovation projects can use joint bridging loans to fund purchases and improvements, with the intention of refinancing or selling once work is complete.

Read more: Unlock the potential of your property with a refurbishment bridging loan.

Business Opportunities

Entrepreneurs might use a bridging loan to quickly secure commercial premises, buy another business or fund stock purchases when time-sensitive opportunities arise.

Read more: Can You Use a Bridging Loan to Buy a Business?


Advantages of Joint Bridging Loans

When you apply for a standard residential mortgage, the amount you can borrow is linked to your income. So if there’s two borrowers, rather than one, this would normally allow you both to borrow more money.

Bridging loans, however, are not based on income or affordability.

The lender is most interested in the property, and its value, and how you plan to pay them back before the loan term ends.

So having a joint loan won’t necessarily mean you can borrow any more. But it may allow you to negotiate a cheaper interest rate, because the lending risk is lower.

Equally, if one borrower has some credit issues then the additional borrower can counter act this issue. If credit history might cause a problem then we can help with a non-status bridging loan, where lenders don’t carry out credit checks up to 70% LTV.

A lot of the time a loan is set up on a joint basis because that’s how the property ownership is arranged, and/or to share the borrowing risk.


Exit Strategies

When you apply for a fast bridging loan you will need to explain how you intend to repay it, this is known as your exit strategy. There’s no right or wrong strategy but the lender will need to assess it before approving the loan.

Selling the Property

Many borrowers plan to repay their bridging loan by selling the property. This strategy works well for renovation projects or when buying below market value with the intention to sell quickly.

Refinancing to a Long-Term Mortgage

Another common exit strategy is refinancing to a standard mortgage. This option is popular for those planning to keep the property long-term, such as buy-to-let investors.

Read more: Can You Pay Off a Bridging Loan with a Mortgage?

Using Personal Funds

Some borrowers plan to repay the loan using personal savings, the sale of other assets, or anticipated income such as an inheritance or business profits.

Read more: Bridging loan exit strategies

Need some help?

If you need a short-term bridging loan then a specialist broker is a good place to start. You will get expert help and advice along with a wide range of lenders to choose from.

To get matched with a specialist broker, please call us on 0330 030 5050.

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