Securing a Bridge Loan with Adverse Credit

Updated: Jun 23

Are you looking to obtain a bridging loan but have a poor credit history? Read further to find out further about the eligibility criteria.




Bridging Finance is a quicker way to borrow money when compared to a traditional mortgage, but it comes at a cost with a higher interest rate and other fees. To understand the costs use our bridging loan calculator or give us a call on 0208 952 5280.


We cover the following topics below


Can I Apply For A Bridging Loan With Adverse Credit?


How Can I Better My Chance of Obtaining a Bridge Loan with Adverse Credit?


How Important Is The Exit Strategy If You Have Bad Credit?




Can I Apply For A Bridging Loan With Adverse Credit?


It's possible to arrange a Bridge Loan if the below apply:


  • Low credit score

  • Late Repayments or Mortgage Arrears

  • Defaults or CCJs

  • IVA's and DMPs

  • Bankruptcy or repossessions


The lender will need to know if you will be able to repay back the loan at the end of the term, so will want to have a watertight exit strategy such as selling the property or through a refinance where an agreement in principle is in place.


How Can I Better My Chance of Obtaining a Bridge Loan with Adverse Credit?


There are simple steps you or your business can follow to help with a chance of approval.


  1. Accurate Paperwork: Having the correct documentation in order to speed up the process. Organising key documents including proof of address, proof of ID and proof of income or bank statements required for an application beforehand will help considerably

  2. Self Credit Check: If you've had issues with adverse credit previously, it's a good idea to download your credit report to understand if there are any irregularities and have them removed.

  3. Speak to a Bridging Loan Specialist: As a UK Bridging Finance Expert, Accelerated Finance works with the whole of the market and can make the correct application on your behalf to the most suitable lender. To understand our process and how we work, you can read more here


How Important Is The Exit Strategy If You Have Bad Credit?


The lender will always first ask how you will pay them back. If you have a poor credit history to mitigate the risk factor a higher deposit and stronger exit strategy will help your case.


  • There are a few lenders who would accept a non-standard strategy including using your inheritance or investment in stocks and shares.

  • If you are taking out a commercial bridge loan having the correct cashflow statements and business plan is solid

  • If you are looking at using a Bridge Loan for a Light Refurbishment to complete a Development Project, your previous development experience is important.

  • A higher deposit of at least 30-35%, the stronger your application and the higher your likelihood of having access to more competitive rates.

  • If your property is based in a higher-value area, this will make it easier for the lender to either sell or rent out the property if there is a need to repossess hence reducing their risk.




Adverse credit issues such as county court judgements (CCJs), late payments or defaults, can have a negative impact on bridging finance applications.


That is unless you use an experienced, knowledgeable bridging finance broker such as Accelerated Finance.


We have an extensive, trusted network of specialists and private lenders that either do not do a credit score check or can see beyond your history of bad credit and lend based on the value of the property used for the loan.


Disclaimer



The articles are intended to provide a general understanding of the topic. The contents should not be treated as advice. Please note Accelerated Finance only considers applications for commercial or investment properties.



Your property may be repossessed if you do not keep up repayments on the finance secured against it.