What is bridging finance and when is it used?
Bridging finance is a form of short-term lending designed to provide temporary capital during a transitional period in a property transaction. It is commonly used when there is a timing gap between the purchase of a new property and the sale of an existing one, or when a borrower needs to settle quickly before longer-term financing is arranged.
In Australia, bridging loans are typically secured by a registered mortgage over real property and have terms ranging from one to twelve months. They are used by property developers, investors, and businesses who require fast access to capital for time-sensitive opportunities.
When should you consider a bridging loan?
Common scenarios for bridging finance include purchasing a new property before an existing property has sold, securing a site at auction where settlement is required within a short timeframe, providing working capital during the period between loan approvals, funding short-term obligations while awaiting the completion of a sale or refinance, and acquiring a development site while awaiting formal construction finance approval.
How does Granor Capital assess bridging finance applications?
Bridging loans are assessed based on the quality and value of the security property, the borrower’s capacity to repay within the agreed term, and the clarity of the exit strategy. The exit strategy is particularly important because the loan is short-term by design. Lenders need confidence that the borrower has a realistic plan to repay, whether through the sale of a property, the settlement of a longer-term facility, or another identifiable source of funds.
Granor Capital obtains independent valuations on all security properties and applies conservative loan-to-value ratios. Each application is assessed on its individual merits using documented credit criteria.
Bridging finance loan parameters
Granor Capital provides bridging finance with loan sizes ranging from $200,000 to $20,000,000. Terms are typically 1 to 12 months. Loan-to-value ratios are available up to 75 per cent. Security is provided by a first registered mortgage over Australian real property. Indicative terms can typically be provided within days of receiving a complete application.
How quickly can bridging finance be arranged?
As a non-bank lender, Granor Capital can typically provide indicative terms within days of receiving a complete application. Full credit assessment depends on the complexity of the transaction and the time required for independent valuation. In straightforward cases, settlement can occur within one to two weeks, which is significantly faster than traditional bank lending timelines.
What is the maximum loan-to-value ratio for a bridging loan?
Granor Capital offers bridging loans with loan-to-value ratios of up to 75 per cent, assessed using an independent valuation prepared by a certified practising valuer. The maximum LVR available for any individual bridging loan depends on the quality of the security, the exit strategy, and the overall risk profile of the transaction.
What exit strategies do you accept for bridging finance?
Acceptable exit strategies for Granor Capital bridging loans include sale of the security property or another property owned by the borrower, refinance to a longer-term facility with a bank or other lender, settlement of another transaction that will generate sufficient funds, or a clearly identified alternative source of repayment. The strength and certainty of the exit strategy is one of the most important factors in the credit assessment of a bridging loan.
Can bridging finance be used for commercial property?
Yes. Granor Capital provides bridging finance secured by both residential and commercial property across Australia. This includes office buildings, retail premises, industrial properties, and mixed-use developments. The same credit assessment principles apply regardless of property type.
Ready to discuss your bridging finance requirements? Contact Granor Capital.
Related: Lending services | Property development finance | Construction loans Brisbane | Bridging finance guide
This page is for general information only and does not constitute financial advice.