Hey friend! So you’re thinking about getting a bridge loan and want to know how long the whole process takes? Well you’ve come to the right place.
Getting a bridge loan can take anywhere from a few days to a few weeks depending on different factors. In this guide, I’ll walk you through everything you need to know about the timeline for bridge loans, what speeds things up, what causes delays, and how to get funding as quickly as possible.
Whether you need cash fast for a time-sensitive real estate deal or have more flexibility, this guide has you covered. Let’s dive in!
What Are Bridge Loans?
First things first – what even are bridge loans?
Bridge loans are a special type of short-term financing used to “bridge the gap” between two transactions. The most common uses are:
- Buying investment property at auction before securing permanent financing
- Covering downpayment on a new home before selling old one
- Renovations or construction projects
- Business cash flow gaps
The “bridge” is the period between when you need money quick and when you’ll have the permanent financing or funds from a sale.
Bridge loans work by using an asset like property or real estate as collateral while you borrow for short periods of time, usually around 12 months or less. The loan gets paid back once longer term financing comes through.
Make sense? Okay, now let’s look at how long you can expect the process to take…
Timeline For Getting A Bridge Loan
The big question: how long does it take to get a bridge loan?
The short answer is usually 1-4 weeks, but it can be as fast as 2-3 days for the right deals.
Here’s an overview of typical timeframes:
- Minimum: 48-72 hours
- Typical: 1-2 weeks
- Maximum: 4-6 weeks
Now let’s look at the factors that affect the timeline.
Factors That Speed Up The Process
If you need funding ASAP, there are some things that can help expedite the bridge loan process:
- Strong credit – Lenders look at your credit score and history, so excellent credit can mean faster approval.
- Low risk deal – Simple project with clear exit strategy means less scrutiny from lenders.
- Solid collateral – Good asset to secure the loan speeds things up.
- Specialist brokers – They have relationships with lenders and can match your deal quickly.
- Prepared paperwork – Having all your documents ready avoids delays.
- Responsive solicitor – You’ll need one who can turn around paperwork fast.
- Unregulated lending – Less red tape than regulated loans.
Factors That Cause Delays
On the flip side, here are some things that can slow down getting a bridge loan:
- Poor credit – Low scores or issues in your history will require more verification.
- High risk deals – Complicated projects with questionable exit strategies get more scrutiny.
- Collateral issues – Problems or disputes with the asset backing your loan.
- Inexperienced brokers – Don’t know the ins and outs of the process.
- Missing paperwork – Waiting for you to provide documents needed to approve.
- Financial changes – Job loss or new debts altering your situation.
- Legal disputes – Any lawsuits or title issues around the collateral.
- Regulated lending – More compliance and oversight than unregulated loans.
The more of these delay factors that apply, the longer the process will take.
How To Get A Bridge Loan Quickly
Alright, so you want to get your bridge loan funded ASAP. Here are some tips:
Get your paperwork in order – Having all your financial docs, projections, and collateral asset details ready avoids back and forth.
Be transparent on credit – Disclose any past issues upfront so they aren’t surprises later.
Use experienced brokers – Their expertise and lender relationships makes things move faster.
Have a solid exit strategy – Lenders want to see how you’ll pay it back, so make this viable.
Find responsive solicitors – Ask brokers for references to lawyers who can expedite legal work.
Consider higher rates – You may pay more in fees and interest for super quick turnarounds.
Select bridge loan specialists – Lenders doing these full-time can process faster than generalists.
Go for unregulated lending – If possible based on your project size. Much less red tape.
Get valuations done early – Helps lenders assess collateral risk sooner.
By anticipating needs, being organized, and leveraging experts, you can get bridge loan funding moved along much more quickly.
Bridging Loan Requirements And Eligibility
Now before you go applying for bridge loans all willy nilly, make sure you actually meet the eligibility requirements!
Here are some of the key things lenders look for:
- LTV ratios – How much you can borrow relative to the asset’s value. Usually around 70%.
- Credit scores – Each lender has minimum score requirements, often 600+.
- Income and affordability – They want to see you can cover payments.
- Valid reasons – A clear need that a bridge loan specifically addresses.
- Collateral – Having a solid asset like property to secure the loan.
- Regulations – Unregulated loans have fewer requirements but lower max amounts.
The specifics vary between lenders but those are the typical standards you need to meet.
Failing to meet them can really slow things down or even get your application denied.
Pros And Cons Of Bridge Loans
Bridge loans offer nice perks but also come with downsides to be aware of:
Pros
- Speed – Can get funding in days when needed for time-sensitive deals.
- Flexibility – Approval based more on asset collateral than your finances.
- Use cases – Fixed-term solution for situations like construction financing.
Cons
- Costs – Higher interest rates and fees than traditional loans.
- Risk – Possibility of losing your collateral asset if not repaid.
- Payments – Large lump-sum due at end of term if no takeout financing.
- Complexity – Lots of legal paperwork and details to navigate.
Make sure bridge loans align with your needs and you understand the risks before jumping in!
In Conclusion
Getting a bridge loan typically takes between 1-4 weeks, with minimums around 2-3 days if you have the right deal and team.
Strong credit, simple projects, organized documents, and leveraging specialists can all help expedite the process.
Before applying, be sure you meet lender requirements and weigh the pros and cons carefully based on your situation.
Bridge loans let you move quickly but also come with additional risks and costs. Do your due diligence!
Hope this guide gave you a good overview of bridge loan timelines and tips for getting funding faster. Let me know if you have any other questions!