If you’re looking at buying investment properties or commercial buildings, an unregulated bridging loan could give you the speed and flexibility you need.
These short-term loans help property investors and business owners move fast on opportunities. Unlike regulated bridging loans for residential homes, unregulated bridging loans focus on business and investment purposes.
You’ll get faster decisions, more flexible terms, and the ability to borrow against commercial assets.
Let’s look at how these loans work, who they suit best, and what you need to know before applying.
Unregulated Bridging Loans
An unregulated bridging loan provides short-term funding which is secured against commercial or investment property.
The key difference from regulated loans is that unregulated bridging isn’t overseen by the Financial Conduct Authority (FCA) because it’s for business rather than residential purposes.
So you can’t have an unregulated bridging loan against your main residence.
These loans work well when you need quick access to funds, often completing in 7-14 days. You can borrow against commercial buildings, residential, mixed-use, buy-to-let properties, or land.
The loan terms usually run from 3-24 months.
Our lenders will consider loans from £150,000 up to £25 million or more. While they’re not FCA regulated, many lenders follow industry codes of practice through bodies like the Association of Short Term Lenders.
The ‘unregulated’ status simply means these loans fall outside FCA rules – it doesn’t mean they’re unsafe or uncontrolled. They just operate under different frameworks designed for business and investment lending.
Read more: Regulated Bridging Loans Explained: Your Questions Answered
Who Uses Unregulated Bridging Loans?
Short-term bridging loans are useful in so many different ways.
Property developers often use these loans to buy and renovate buildings before selling them on. A developer might spot a run-down office block that could be converted into modern workspaces. The bridging loan lets them buy quickly and fund the renovation work.
Buy-to-let landlords expanding their portfolios also benefit. For example, a landlord might use an unregulated bridge to snap up several flats in a new development, then refinance onto buy-to-let mortgages once tenants are in place.
As a business owner you might want to buy your business premises rather than keep renting, but need to move faster than a commercial mortgage allows. Or perhaps you’ve found the perfect retail unit but need quick funds to secure it before a competitor does.
These loans also help investors buy at auction, where you need to complete within 28 days. Rather than missing opportunities while waiting for long-term finance, a bridging loan lets you act fast and compete with cash buyers.
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Let’s talk bridging loans!
Common Uses for Unregulated Bridging Finance
Property Investment
You’ll often see these loans used for buying investment properties, especially at auction.
They help when a property needs work before it can get a standard mortgage. Take a commercial building that needs updating – you could use a bridge to buy and renovate it, then switch to a commercial mortgage once improvements are done.
Or it can be used to snap up a buy to let. After a quick refurb you can remortgage over to a BTL mortgage.
Business Purposes
Beyond property, these loans can support various business needs.
You might use one to buy stock at a discount, fund a business expansion, or even help with cashflow while waiting for confirmed income. Some businesses use them to break property chains when moving to new premises.
General Capital Raising
If you have residential or commercial property this short-term finance can help you raise cash quickly. For almost anything.
- Need some cash to pay a tax bill? No Problem.
- Need some cash to buy a new car? No Problem.
- Need some cash to buy a Spanish villa? No Problem.
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How Unregulated Bridging Loans Work
The basics are straightforward, you borrow against a property’s value for a short time, then you pay everything back.
Most lenders offer up to 75-80% of the property’s value, though some go higher with extra security. You’ll agree on an exit strategy upfront – usually either selling the property or refinancing to a longer-term loan.
You will be charged interest each month. Most borrowers roll up the interest and pay everything at the end of the term. This option helps if you’d rather use your cash for the project itself.
The legal process moves much faster than with regulated loans. This is because lenders focus mainly on the property’s value and your exit strategy rather than complex income and affordability assessments.
Benefits and Considerations
These loans offer real advantages for business and investment purposes.
You get quick decisions, flexible terms, and the ability to borrow against a huge variety of property types. They work particularly well when traditional lenders move too slowly for your needs.
However, do consider the higher costs compared to standard mortgages. You need a solid exit strategy and should understand that your property serves as security.
Non-status lending
Unregulated loans have less formalities than their regulated sibling.
Here it’s the lender that decides what checks to do.
So non-status lending can offer:
- No income checks
- No affordability checks
- No credit checks
- Adverse credit accepted
- 80% loan to value
- Speed!
It will cost a bit more, but look at what you get in return.
Read more: What is a Non-Status Bridging Loan?
Multiple property loans
Owning multiple properties opens up interesting borrowing possibilities, yet many property owners don’t realise they can use their combined equity more effectively.
Cross charge bridging loans let you use multiple properties as security for a single loan, rather than limiting yourself to the equity in just one property. This means, with the right collateral, you can fund 100% of a new property purchase, by leveraging your property portfolio.
Read more: Cross Charge Bridging Loans Explained
How a Broker Can Help
A specialist broker makes a big difference with unregulated bridging loans. They know which lenders suit different situations and can often access exclusive rates. More importantly, they’ll help structure your application and exit strategy to improve your chances of approval.
Brokers also save you time by approaching the right lenders first time. They understand the market’s complexities and can explain your options clearly. When deals need to move quickly, this expertise proves invaluable.
Alternatives to Consider
Sometimes other options might work better.
Commercial mortgages offer lower rates if you have time to wait. Development finance could suit larger projects, while business loans might work for smaller amounts.
Your broker can help compare these choices against bridging finance.
Next Steps
If you’re considering an unregulated bridging loan, start by clarifying your exact needs and timeline.
Think about your exit strategy and gather basic information about the property involved. Then speak with a specialist broker who can guide you through your options.
Remember, while these loans aren’t FCA regulated, they’re still financial commitments. Take time to understand the terms and costs, and make sure the loan fits your business or investment strategy.
FAQ
Unregulated bridging loans are for business, investment and commercial property, while regulated loans are for residential homes you’ll live in. Unregulated loans offer more flexibility but aren’t overseen by the FCA.
Most unregulated bridging loans can complete within 5-7 days, depending on the property type and documentation readiness.
Read more: How Quickly Can You Get a Bridging Loan?
Our lenders offer unregulated bridging loans from £150,000 upwards, with no maximum.
Yes, you’ll usually need at least 20-25% of the property value as a deposit, though exact requirements vary by lender and property type.
Read more: Do You Need a Deposit for a Bridging Loan?
Yes, as lenders focus more on the property value and exit strategy than credit history. However, a poor credit history might affect your interest rate.
Terms usually range from 1-24 months, with most loans lasting 6-12 months. Some lenders offer longer terms for specific circumstances.
Read more: How long can you have a bridging loan for?
Only if it’s for investment purposes like buy-to-let. If you plan to live in the property, you’ll need a regulated bridging loan instead.
Commercial property, buy-to-let properties, mixed-use buildings, land, and investment properties are all eligible.
Most lenders offer up to 75% LTV, though some go higher with additional security or for strong cases.
