Refinance exits
Refinancing relies on a longer-term lender being willing to lend when the bridge ends. That depends on valuation, lettings, your finances and the market at that future point. Speak to the likely exit lender, or a broker, before taking the bridge to check the property should fit typical criteria once the work or letting is done.
Sale exits
Selling depends on demand, price and time to complete. Commercial sales can be slow, and buyers may need their own finance. Pricing optimistically to make numbers work is a common weakness. Agent advice on realistic value and timescale is useful evidence.
When exits fail
If the bridge reaches its end date unpaid, lenders may charge default interest and fees, offer an extension at a cost or enforce against the property. Rolled interest keeps growing, reducing equity. A repossession sale may achieve less than market value, and personal guarantees may be called.
Hypothetical example, not a real client: a buyer plans to refinance after letting a vacant unit, but the tenant withdraws. Because the buyer had agreed a fallback sale plan and kept reserves, there was time to remarket the space or sell rather than default.
Strengthening the plan
Lenders tend to respond better to exits that show:
- Evidence from agents or lenders, not assumptions
- Time built in for delays
- A second exit if the first fails
- Reserves to cover interest or costs during delays
Matching the bridge term to the exit
The bridge term should comfortably exceed the time you realistically need, not the time you hope for. Map each step: completing purchase, finishing works, letting, getting a refinance valuation and legal completion. Each step has its own delays. A term that only works if everything runs to plan leaves no room for the ordinary friction of property transactions.
Revisit the exit during the bridge. If lettings slip or the market moves, raise it with your broker early. Options are usually wider several months before expiry than in the final weeks, when lenders know you are under pressure.
Exit evidence lenders find persuasive
Agent letters estimating sale value and timescale, heads of terms with a prospective tenant, planning consents, and an indication of appetite from a term lender all give substance to an exit. Unsupported statements that the property will be worth more later carry little weight. The aim is to show a lender that the exit depends on things you can evidence rather than optimism.
Sale and refinance at the same time
Some borrowers plan to sell part of a site or one property in a portfolio and refinance the rest. These blended exits can work but depend on several events happening on time. Lenders may ask for a plan showing how each part repays and in what order, and may hold back release of security until enough is repaid. Keep the plan simple enough that one delay does not break it.
Hypothetical example, not a real client: an investor bridges two adjoining units, planning to sell one and refinance the other. Building in time for the sale to slip protects the refinance.
Your property may be repossessed if you do not keep up repayments on a loan secured on it. Sorbus Finance is a broker, not a lender. Finance is subject to lender criteria, status, valuation and affordability. We work with a panel of lenders, not the whole market, and do not promise a rate, fee level or outcome.