The first step to applying for a bridging loan is usually to talk to a broker. Their job is to assess the loan application and then get an initial approval from a lender. Many borrowers are looking for a speedy bridging loan. It can happen that after the initial yes decision the lender turns it down. The borrower sees this as a waste of
valuable time. If the loan is needed for a time-sensitive deal a delay of a few days could mean that the deal falls through.
A yes turning to a no is not usually the broker’s fault. They present the application to the lender and the lender approves it. Some lenders use external credit to fund loans. After a lender has approved a loan, they will ask for money from their external source, which may decide that the loan is too risky and deny funding. If a lender has its own source of funding then it is unlikely that they will, reverse the decision.
A good broker will know which lenders are likely to stick with the initial loan approval and not reverse it. They may not be the cheapest, but they could be more reliable.
Any bridging loan offer is subject to the borrower supplying documentation to prove their financial status, and the property used as security needs to be valued. If the documentation is not correct or there is a problem with the valuation report, this could result in the loan being turned down.
