Getting quick property finance when you’re self-employed can feel like an uphill battle.
Many high street lenders shy away from complex income structures or variable earnings, which leaves business owners and freelancers struggling to seize time-sensitive opportunities.
But there’s good news – your self-employed status doesn’t have to hold you back from property purchases or business growth. Bridging finance offers a practical path forward, with lenders who understand that income doesn’t always fit into neat monthly boxes.
In this guide, we’ll walk you through how bridging finance works for self-employed borrowers, what you’ll need to apply, and how to build a strong application.
Why It’s Called ‘Bridging’ Finance
The term ‘bridging’ perfectly describes what these loans do – they bridge the gap between needing money now and having it later.
Let’s say you’ve found the perfect commercial property for your business, but you’re still waiting for your current premises to sell. Without bridging finance, you’d have to wait – and risk losing your ideal property. A bridging loan lets you borrow the money, on a short-term basis, to buy the new property now, then repay it when your old one sells.
Or imagine you’re at a property auction. You’ve spotted an amazing deal, but your business mortgage application will take months. A bridging loan creates a short-term path to buy the property quickly. You can then take your time arranging long-term finance which pays back the bridge loan.
Small business owners often use bridging loans when opportunity and timing don’t line up perfectly. Maybe you need to buy stock for a big order, but payment terms mean you won’t see the money for three months. Bridging finance helps provide the cash-flow you need.
It’s worth noting that these loans aren’t meant to last.
They’re designed as a temporary solution – usually for a few months up to a year – while you arrange your longer-term plans.
What is Bridging Finance for Self-Employed Borrowers?
As a self-employed person, you might find bridging finance more straightforward than you’d expect.
While mortgage lenders want years of accounts and steady earnings, bridging lenders are more interested in the property you’re buying and how you’ll pay them back.
You’ll come across two main types of bridging finance.
‘Closed’ bridging loans work well when you know exactly when you can repay – for instance, if you’ve exchanged contracts on a property sale.
‘Open’ bridging loans offer more flexibility if your repayment date isn’t set in stone.
The amount you can borrow depends on your property’s value – lenders often offer up to 75% of the property value, from £150,000 upwards. Most loans run for 3-18 months, giving you time to either sell the property or arrange longer-term finance.
First charge loans work when there’s no existing mortgage on the property. If you already have a mortgage, a second charge loan is possible, this lets you borrow additional funds while keeping your current mortgage in place.
Read more: First, Second & Specialist Charges in Bridging Finance
Who Can Apply for Self-Employed Bridging Finance?
You’ll find bridging finance much more welcoming to self-employed applicants than standard mortgages.
Business owners, contractors, freelancers, and property developers can all apply, often without the lengthy trading history that other lenders ask for.
The main reason is that these loans are only available for short periods; 6 months, or 12 months. After this the lender will be expecting their loan to be fully repaid.
So the need to check your income and what you spend your money on each month is not there.
If you run your own company and you’ve only been trading for 12 months, many bridging lenders will consider your application – a refreshing change from the 2-3 years other lenders require.
Contractors and freelancers often use bridging finance between projects. You won’t need to show years of contract renewals – instead, lenders focus on your property’s value and your plan for repaying the loan. This makes it easier to grab opportunities even when you’re between contracts.
Basic eligibility usually comes down to:
- Being over 18
- Having a UK property to secure the loan against
- Showing a clear plan for repayment
- Demonstrating how you’ll cover any interest payments
Beyond these, each application stands on its own merits – far simpler than ticking endless boxes for traditional lenders.
Let’s talk bridging loans!
Common Uses for Self-Employed Bridging Finance
Self-employed borrowers use bridging finance to solve property challenges and help grow their businesses.
Let’s look at how these loans work in real situations.
Property auctions move fast – you’ll need to come up with all of the money within 28 days of winning a bid. As a self-employed person, auction bridging finance lets you act fast and secure properties before slower buyers get a look in. You can then take your time arranging a mortgage or selling another property to repay the bridge.
For business premises, bridging finance helps when you need to move quickly. Perhaps your landlord’s selling up, or you’ve found the perfect shop that’s priced to sell. Instead of missing out while you arrange a commercial mortgage, a bridging loan gets you through the door.
Breaking property chains becomes much simpler with bridging finance. If you’re selling your current home but your buyer’s pulling out, a bridge loan lets you go ahead with your purchase. You can then sell your old property without rushing to accept a lower offer.
Property refurbishment projects often start with bridging finance too. You can buy a property that needs work – perhaps one that’s unmortgageable in its current state – then fix it up before refinancing or selling.
Read more: What can a bridging loan be used for?
What Documents are Needed?
All loans will require the usual ID and address checks, there’s no getting out of these. Expect your broker, the lender and your solicitor to be checking who you are.
The lender will want you to tell them:
- What the money is for
- And (in detail) how you will pay it back
If your exit is via selling the property, provide comparables and valuations from local agents.
If you’re planning to sell another property, gather evidence of its value and any interest from buyers.
For refinancing exits, you might need an agreement in principle from your future mortgage lender.
If the loan doesn’t require any monthly payments, and few do, your monthly income or affordability won’t be a relevant factor.
Unless, it’s a regulated bridging loan. Regulated loans are those associated with your home, or a property that will be your home. These have stricter requirements as they are regulated by the FCA.
Remember – a broker can help you get your paperwork in order before you apply. They’ll know exactly what each lender wants to see, which helps avoid back-and-forth requests that slow things down.
Read more: Applying for a bridging loan
Exit Strategy Planning
Your exit strategy is how you’ll repay the bridging loan at the end.
This matters more to lenders than your employment status or credit score. Think of it as your roadmap to moving from short-term finance to paying off the loan completely.
Most borrowers choose one of three main exit routes.
Selling
Selling a property is the most straightforward – you borrow against one property then use the sale proceeds to clear the bridge. This works well if you’re confident about your property’s value and the local market’s strength.
Refinancing
Refinancing to a longer-term mortgage suits many business owners. You might use a bridge to buy a property quickly, spend a few months getting your paperwork in order or improving the property, then switch to a commercial or buy-to-let mortgage. Just make sure you know what you’ll need to qualify for that mortgage before taking out your bridge.
Future funds
Some borrowers plan to use business income or a chunk of money they know is coming – maybe from a big contract, property sale or the sale of business assets. If this is your plan, you’ll need solid evidence of these future funds.
But here’s something many people overlook – you will also need a backup plan.
Markets change, sales fall through, and refinancing criteria can shift. Smart borrowers line up a second exit route.
This might mean:
- Having another property you could sell if needed
- Keeping some assets that could be sold quickly
- Building relationships with several mortgage lenders
- Having an investor who could step in if required
Work backwards from your exit strategy when planning your bridge. If you’re aiming to refinance in six months, check current mortgage criteria and allow time for any improvements you’ll need to make. If you’re selling a property, research recent sale times in your area and add a buffer.
Remember – lenders aren’t trying to catch you out. They want to see that you’ve thought through your plans and prepared for different scenarios. A well-planned exit strategy often leads to better loan terms.
How a Broker Helps Self-Employed Borrowers
Working with a broker makes getting bridging finance much simpler when you’re self-employed or have a complex income. They’ll understand your unique income setup and know which lenders will work best for your situation.
Many bridging lenders only work through brokers, which means you’ll get access to options you wouldn’t find on your own. These specialist lenders can offer better terms for self-employed borrowers because they understand how different business models work.
Good brokers know how to package applications for self-employed clients. How to present your business income, whether you’re a company director taking dividends, a freelancer with multiple income streams, or a contractor working through a limited company.
Brokers speak the lenders’ language, they’ll highlight the strengths in your application that you might not even think about. Your varied income might seem like a problem to you, but your broker will know how to present it as proof of a sustainable business model.
They’ll also manage the whole process for you. While you’re running your business, they’re chasing valuers, talking to solicitors, and keeping your application moving. This means less time away from your work and a smoother path to completion.
Think of a broker as your property finance partner – someone who can explain your options clearly and guide you to the right solution for your business.
Alternative Finance Options
While bridging finance works well for many self-employed borrowers, you may have other options too.
Commercial mortgages
Commercial mortgages suit business owners looking for long-term property finance. They take longer to arrange but offer lower interest payments over a longer period – perfect if you’re buying premises you plan to keep. You will need to demonstrate that there is income available to keep up with the repayments.
Development finance
Development finance works better for larger renovation or build projects. You’ll get the money in phases as your project progresses, which helps manage cashflow. This suits builders and developers taking on bigger refurbishments or new builds.
Asset finance
Asset finance lets you borrow against equipment or machinery your business owns, or wants to buy. While it won’t help with property purchases, it’s worth knowing about if you need to free up cash quickly without using a specific property as security.
Being self-employed shouldn’t stop you from accessing property finance when you need it.
Bridging loans offer a quick, practical solution when you need to move fast on a property deal. You’ll need a solid exit strategy and the right paperwork, but lenders will be looking at your property plans rather than your employment status.
Ready to explore your options?
Speaking with a broker who knows the bridging market can help you understand what’s possible. They’ll look at your specific situation and help you find the right solution – whether that’s bridging finance or another lending option.
Get in touch to discuss your plans. Our team understands self-employed borrowing and can help you make your next property move happen.
FAQ
Yes, many bridging lenders will consider applications from newly self-employed borrowers. Unlike mortgages, bridging loans focus more on your property and exit strategy than your trading history.
Most lenders require 25-30% deposit, though this can vary based on the property type and your exit strategy. Some offer higher loan-to-value ratios for strong applications.
Read more: Do You Need a Deposit for a Bridging Loan?
While a good credit score helps, it’s not always essential. Lenders mainly focus on your property’s value and exit strategy. A few blips on your credit profile should be OK.
Yes, commercial bridging finance works well for business premises, especially when you need to move quickly or the property needs renovation before a commercial mortgage.
Our loans range from £150,000 upwards, with amounts based on the property value. Most lenders offer up to 75-80% loan-to-value.
Yes, you’ll need a solicitor for the legal work. Most lenders have a panel of approved solicitors experienced with bridging finance.
Read more: Do I Need a Solicitor for a Bridging Loan?
While helpful, full business accounts aren’t always essential. Bank statements and proof of your exit strategy matter more.
You can usually choose to service the interest monthly or roll it up to pay at the end of the term. Some lenders offer retained interest options. Remember that if you choose the monthly option, the lender will want to check that you have the income to do this.
Read more: How Do Bridging Loan Interest Options Work?
Yes, limited company directors can access bridging finance, either personally or through their company.
Commercial Bridging Loans are useful when there is a short-term funding gap.
The loan is available for almost any purpose and is secured against a commercial property, either one you own or one you are buying.
