BRIDGE LOANS
Bridge loans: fast, real estate secured finance for companies and developers
A bridge loan is short-term finance, usually secured on real estate, that covers a temporary gap: until an asset is sold, the long-term bank financing arrives or a payment comes in.
At Manifest we structure it with a clear exit from day one, which is what makes a bridge deal work.
If any term is unfamiliar, it is explained in our financing glossary.
WHEN
Typical situations
A bridge loan fits when there is a temporary gap and a clear exit to close it:
Buying before selling
The company buys a new asset and repays the loan when it sells the old one.
Closing a purchase with a deadline
An opportunity with a deadline that cannot wait for a bank committee.
Refinancing a maturity
Debt falling due that needs time to be reorganised.
Until the long-term financing arrives
Covering the period until the licence, the pre-sales or the bank loan for the deal are in place.
Cash against a property
Cash for the company backed by a property it owns.
Reorganising debt with imminent maturities
Buying time to negotiate or sell on good terms.
THE KEY
The exit
Every bridge loan needs an exit, that is, a clear way to repay it. The most common are:
- The sale of an asset.
- A long-term bank refinancing.
- An expected payment, such as a grant, a tax refund or a deal in progress.
- The business’s own cash flows.
The lender assesses whether that exit is credible and the timing realistic. If the exit is delayed, the deal gets more expensive. That is why we plan it with headroom and a fallback.
STRUCTURE
How it is structured
- Collateral: usually a mortgage over a property, ideally unencumbered.
- Amount: sized on the value of the collateral and how easy it would be to sell.
- Tenor: short and matched to the expected timing of the exit.
- Cost: interest and an arrangement fee, plus valuation, notary and land registry costs. Interest can be paid periodically or retained upfront, depending on the deal.
- Early repayment: it is worth negotiating from the start the option to repay early without an excessive penalty.
BALANCE
Advantages and what to weigh up
| Advantages | What to weigh up |
|---|---|
| Fast decision | Higher cost than a bank loan |
| Relies on the collateral, not just the company’s track record | Short tenor: the exit must be clear |
| Flexible structure, tailored to the deal | If the exit is delayed, extensions and extra cost follow |
| Lets you seize an opportunity | Valuation, notary and land registry costs |
A bridge loan is a tool, not a fix for every problem. If the exit is not credible, we will tell you before we start.
CRITERIA
What the lender looks at
- The value of the collateral: based on a recent, realistic valuation.
- The liquidity of the asset: how easy it would be to sell if needed.
- The exit: how and when the loan is repaid, and with what headroom.
- Land registry status: ownership and encumbrances, according to the registry extract.
- Who is borrowing: the company or developer, its experience and its position.
METHOD
How we work
- First conversation, free of charge. We look at the deal, the collateral and the planned exit.
- Exit analysis. We check that the timing and the repayment plan are realistic, and set out a fallback.
- Information pack. Collateral, land registry documents and exit plan, the way a lender asks for them.
- Presentation to selected lenders. Those who work with that type of asset and tenor.
- Negotiation and closing. Terms, early repayment and signing before a notary.
Fees: we work mainly on a success basis. Terms are agreed in writing before we start.
QUESTIONS
Frequently asked questions
How long does it take to get a bridge loan?
It is one of the fastest types of finance when the documentation on the collateral and the deal is complete. Timing depends mainly on the valuation and the land registry status of the property.
What collateral is needed?
Usually a property. It can be unencumbered or carry a mortgage that is repaid out of the new loan. We assess it case by case.
What if I cannot sell in time?
An extension can be negotiated, but it makes the deal more expensive. That is why we plan the exit with headroom and a fallback from the start.
Can it be repaid early?
It depends on the contract. We recommend negotiating early repayment from the outset.
Is it for individuals?
No. We arrange bridge loans for companies and developers. We do not arrange loans to individuals secured on their home.
Is it the same as a mortgage loan?
It is secured by a mortgage, but it is short term and designed for a specific exit. A bank mortgage loan is long term and repaid in instalments from business income.
Need finance until the sale or the long-term financing comes through?
Tell us which property would be the collateral, what you need the loan for and how you plan to repay it. We will tell you whether the deal makes sense. You can also call us on +34 678 131 989.
The information on this page is general and does not constitute an offer of finance. Each deal is analysed individually and approval always depends on the lender. We do not arrange consumer loans secured on residential property.