# 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 1&#x32;**%–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**

1. **High, predictable yield** — returns are driven by contractual interest, not market speculation.
2. **Collateralized lending** — physical property provides a tangible security buffer.
3. **Short duration** — capital can be recycled multiple times a year.
4. **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.
