What is bridging finance?
A bridging loan is a temporary loan that sits between two events. The most common situation is buying a new property before your current one sells. Instead of waiting for your sale to settle, a private lender gives you the money upfront. Once your current property sells, you use those funds to pay back the bridging loan.
Bridging is called "bridging" because it literally bridges a gap in time. You might need it for 1 month or 2 years — whatever your situation requires. The key is having a clear exit plan: when you'll sell the first property, refinance to a bank, or settle another deal.
Who uses bridging finance?
Bridging finance is useful in all sorts of situations. Here are the most common ones:
- Selling and buying at the same time. You've found a new home but your current property hasn't sold yet. Bridging covers the shortfall.
- Auction purchases. You won an auction but the settlement date is weeks away. You can move in immediately and repay the bridging loan once you've arranged a regular mortgage.
- Developers and property investors. A developer might use bridging to buy a block of land, build on it, and then repay once the units are sold. An investor might use bridging to acquire a property before their current investment sells.
- Deceased estates. When someone passes away, their estate might need to bridge costs until the property sells or probate is settled.
- Urgent settlement. In rare cases, you need to settle a property within days. Banks can't move that fast, but bridging lenders can.
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Check Your OptionsHow bridging finance works
Bridging is simpler than a traditional mortgage because the lender doesn't need all the same paperwork. Here's the basic flow:
- Step 1: You need fast cash. You want to buy a new property but can't wait for your current one to sell. You contact a bridging lender.
- Step 2: The lender looks at the security. They ask what properties you own, what they're worth, and how much you need to borrow. The property is the security — not your income or credit history.
- Step 3: Agreement and settlement. If the deal stacks up, the lender can settle in days — sometimes 1 to 5 business days. You get the money, you buy your new property.
- Step 4: You repay. Once your current property sells, you use those funds to repay the bridging loan. Or you refinance to a bank at a lower rate.
What a typical deal looks like
Illustrative example — not a real caseImagine Sarah. She owns a house worth $800,000 with a mortgage of $300,000. She finds her dream property for $900,000 but won't get the proceeds from selling her house for 8 weeks. She can't wait — someone else is interested.
A bridging lender offers her $600,000 — enough to buy the new property (along with $300,000 of her own cash from a deposit). The equity in her current home is $500,000, so the lender has security. In 8 weeks, her house sells for $800,000. She uses $600,000 to repay the bridging loan, and has $200,000 left as equity in her new home.
What lenders want to see
Bridging lenders don't follow the same rules as banks. They don't care much about credit scores or income. Instead, they focus on three things:
- Property value and equity. How much is the property worth and how much equity do you have in it? The more equity, the stronger your case.
- The exit plan. How will you repay the loan? The most common answers are: sell the first property, refinance to a bank, or complete a development deal.
- Total borrowing. How much are you borrowing relative to what the property is worth? This is the loan-to-value ratio (LVR). Lower LVR means lower risk for the lender.
Most bridging lenders accept credit-impaired borrowers and lo doc options — meaning you don't need full bank statements or accountants' reports. The property is the focus, not your credit file.
When bridging finance might not be the right option
Bridging isn't a magic solution. It won't work if:
- You have no realistic timeline for selling or refinancing. Bridging needs an exit date. If you're vague about when you'll repay, lenders won't proceed.
- The total borrowing is too high relative to what the properties are worth. If you need to borrow 100% or more, there's no safety net for the lender.
- The property is too unusual or hard to value. If the lender can't figure out what a property is worth, they can't calculate the risk.
- You're in financial distress and have no way out. Bridging is meant to be temporary. If you're in serious hardship, other options might be better.
Our panel includes specialist private lenders who actively fund bridging situations. Across these lenders:
- Credit-impaired borrowers are accepted — your credit history won't automatically disqualify you
- Lo doc options available — some lenders don't require full accountants' reports or financials
- Settlement in as fast as 1-5 business days for straightforward deals
- Coverage across all Australian states and territories
- Loan sizes from $50K up to $80M — residential and commercial
The exact lender and terms depend on your specific situation. Describe what you're trying to do and our AI will match you with the most suitable lenders.
Common bridging finance scenarios
Below are the most common situations we see. Click on any one to read the detailed guide: