Most bridging lenders will not consider a loan for less than £25,000, but what’s the most that can possibly be borrow?
Many lenders have an upper limit of £15m, but there are some organisations that will consider bridging loans for much more than this
Traditionally, a bridging loan is secured against a residential house and used to quickly complete a housing purchase. The average UK house costs about £300,000, and the average bridging loan is for around £150,000.
For landlords and property developers, the amount that they borrow on a bridging loan can be huge. In May 2017, BridgingAndCommercial.co.uk reported that the Cambridge & Counties bank has arranged its largest ever bridging loan to finance a £130m mixed use development in Salford.
Huge bridging loans are not just provided by banks – the Italian government in May 2017 arranged a €600m (£504m) loan to the airline Alitalia. This was designed to provide financial breathing space for the loss-making company until a more long-term solution is found.
One of the largest bridging loans ever recorded was for $2.65bn (£2.05bn). This was lent to the Sibanye company to purchase the South African mining company Stillwater Mining. If the deal goes through, Sibanye will become the world’s largest platinum metal producer.
The bridging loan sector has come a long way from the days when bridging finance was a loan of last resort for completing house purchases. Bridging finance is a now flexible way to raise finance and is used by many businesses.