What exit strategies do bridging lenders accept?
Three main exits: selling the property, refinancing onto a longer-term mortgage, or repaying from the sale of another asset.
Each is acceptable in principle. What matters is whether your version of it is realistic for this property, this borrower and this timetable. A lender will test the exit in detail before it tests almost anything else.
What evidence supports a sale exit?
Comparable sales that support your expected price, a realistic marketing plan and a timeline that fits comfortably inside the term.
Agents' appraisals help, but lenders give more weight to completed sales of similar properties nearby. If works are planned before the sale, the lender will also want to see that the budget and programme are achievable.
Where the sale depends on a particular buyer or market, expect the lender to ask what happens if that buyer falls away.
What does a lender check on a refinance exit?
That you will qualify for the term loan when the bridge ends — on rental or trading income, on the property's condition and on your own circumstances.
A refinance exit is only as strong as the term lender's criteria. If the property needs to be let, finished or trading to qualify, the bridge has to allow time for that to happen. An indication from a term lender, obtained at the outset, strengthens the case considerably.
How much time should the exit leave within the term?
Enough to absorb the delays that commonly hit sales and refinances, such as slow legal work, valuations and buyer chains.
An exit that only works if everything happens on time is a weak exit. Lenders prefer a term with headroom over one cut to the minimum, even if the longer term costs a little more. [STAT + SOURCE]
Do lenders want a back-up exit?
Yes. A credible second route — for example, refinancing if the sale is slow — reassures a lender that the loan will still be repaid if plans change.
The fallback does not have to be your preferred option. It needs to be realistic. Setting it out at application stage shows the lender you have thought about what could go wrong.
What happens if the exit changes during the loan?
Tell the lender early. Most will consider a revised exit or an extension, but terms are better agreed before the deadline than after it.
If the term ends without repayment or an agreed extension, the loan can move onto default terms, which are significantly more expensive. Check the extension and default provisions in the offer before you sign, so you know the cost of a delay in advance.