Bridging Loan
What is a Bridging Loan
A bridging loan is a short-term, asset-backed financing instrument used to “bridge” an immediate funding gap until a longer-term solution is in place. In the UK property market—one of the most mature and regulated globally—bridging loans are a critical part of the real estate and development ecosystem.
Key Characteristics
Short-term maturity: Typically 6–18 months, designed to cover urgent financing needs.
Asset-backed: Secured against real estate, often with conservative loan-to-value (LTV) ratios of 50–70%.
High interest rates: Annualized yields between 12%–18% due to the speed, flexibility, and specialized nature of the loan.
Fast execution: Funding can be arranged in days, not months, making it invaluable for time-sensitive transactions.
Legal enforceability: Loans are documented under UK law, with registered charges on the property as collateral.
Why It’s Attractive to Investors
High, predictable yield — returns are driven by contractual interest, not market speculation.
Collateralized lending — physical property provides a tangible security buffer.
Short duration — capital can be recycled multiple times a year.
Established market — the UK bridging loan sector is a multi-billion-pound industry with a track record of low default rates when managed properly.
Typical Use Cases
Property acquisition: Buyers secure funding quickly while arranging long-term mortgages.
Development finance: Developers fund construction or renovation before refinancing.
Auction purchases: Rapid financing to meet auction payment deadlines.
Refinancing: Replacing existing loans when time-sensitive opportunities arise.
How It Fits BridgingFi
In BridgingFi’s model:
We originate or source UK bridging loans through regulated channels.
These loans form the real-world yield base for our platform, delivering 8–12% annual returns.
We place them into SPVs, tokenize them as RWA assets, and ultimately allow Bitcoin holders to earn yield via our BTC-Fi layer.
By starting with bridging loans, we anchor our entire yield structure in a proven, cash-flowing asset class before scaling into other forms of credit.
In Simple Terms
A bridging loan is like a financial “fast lane”: Borrowers get quick, asset-secured funding when they need it most. Investors get high, stable returns backed by tangible property collateral. For BridgingFi, it’s the perfect foundation to connect Bitcoin capital with real-world yield.
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