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These types of loans are also called bridge financing or a bridge loan. A bridging loan is short-term financing used until a person or company secures permanent financing or removes an existing obligation. Bridge loans are short term, typically up to one or two years. These types of loans are generally used in real estate

Roma considers bridging finance from £75,000 up to £3 million although larger loans can be considered by referral.

A bridging loan can be used for almost any purpose such as:

• Purchases from auction – with fast completion in the required time frame
• Planning gain / change of use – to maximise property value and income
• Chain breaking mortgage – to enable a borrower to progress a purchase before completing a sale on their existing property
• Releasing cash from probate on an inherited property – so that the property can be sold
• Refurbishment finance – to maximise rental income
• Purchase at undervalue – letting a borrower capitalise on a one-off opportunity

In most circumstances an exit strategy will be required to ensure there is security on how the finance will be repaid. Exit routes are usually the sale of the property that the loan has been secured against or refinance via another form of finance.

At Roma, all our loans are manually underwritten with a focus on the borrower instead of the property. There is a focus on the strength and capability of the borrower and their exit strategy In order to pay off the loan.

A refurbishment loan is a type of bridging loan, a secured borrowing available for developers and landlords looking to improve a property before selling or renting out. The finance is essentially to cover the costs of property refurbishment.

The definitions for light medium and heavy refurbishment are different for each lender. The nature of the requirements will determine which option is most appropriate. At Roma, our guidelines are as follows

• Light – Cost of Works are 20%-50% of Current Market Value
• Medium – Cost of Works are 50%-100% of Current Market Value
• Heavy – Cost of Works are over 100% of Current Market Value

Auction finance is simply another term for bridging or short term finance. It is used to purchase properties at auction because it can be arranged extremely quickly and fits neatly into the purchasing timescales of the auction houses. Usually properties at auction are required to complete with 28 days.

Typically any kind of residential, semi commercial or commercial property can be bought at auction. The properties do not necessarily need to be habitable to be eligible for auction finance.

Developer exit lending, commonly called a development exit loan is a short term finance option that enables a property developer to refinance, usually at a lower rate than their initial development finance facility. Development projects quality for developer exit funding when they are wind and watertight. This funding allows developers to release equity and also save on interest payments due to a lower rate.

GDV stands for Gross development Value. It is an estimate of the open market value or rental value a property development is likely to have on completion. It is determined on the basis of current and recent similar transactions.

Roma considers development finance up to £3 million although larger loans can be considered by referral.

Commercial bridge loans (also known as commercial mortgage bridge loans) are short-term commercial real estate loans that are used for the purchase of commercial properties when permanent financing is not an option. Their primary use is when a property needs significant renovation before it will qualify for permanent financing.

Commercial bridging, also known as a commercial bridge loan is lending on commercial property, such as offices, retail units or industrial premises. It can also be used by those who want to purchase or refinance larger or more complex residential properties.

Currently, all commercial bridging finance is non-regulated, meaning the FCA extends no protection or supervision to this area of the industry. If you’re securing a loan for an investment property, a commercial building, or for a buy-to-let it will not be regulated.

LTV stands for loan to value and is a measure of the balance between the amount of the mortgage and the property value.