The Intermediary – August 2025 - Flipbook - Page 53
SPECIALIST FINANCE
Opinion
Why no exit often
means no entry
S
peed is oen seen as the
holy grail in bridging
finance, and rightly so,
but speed without clarity
is a risk that few lenders
are prepared to take.
While borrowers are typically focused
on accessing funds quickly, and most
bridging lenders are well-equipped to
deliver, a clearly defined exit strategy
remains critical.
It’s this combination of pace and
purpose that enables funding to flow.
Without it, many applications won’t
make it past the first conversation.
The principle is simple: bridging
finance is short-term by design.
Whether the loan is intended to
support a chain-break, fund a
time-sensitive purchase, or provide
capital ahead of refinancing, lenders
need assurance that the money can
be repaid, usually within six to
18 months.
That’s why a robust exit plan,
whether via sale, long-term refinance
or portfolio restructuring, is at the
heart of every successful application.
The question every lender asks is:
“How is this loan going to be repaid?”
If the exit is a property sale, lenders
want evidence of valuation accuracy,
marketability, and comparable sales.
If it’s refinancing, they’ll assess the
borrower’s eligibility for term lending
at the point of exit, not just now. In
portfolio scenarios, they’ll expect
detailed business plans that map out
income generation, debt servicing
and viable refinance structures to
calculate risk in today’s high-stakes
property market.
This outlines how far the bridging
sector has come in recent years
when it comes to the increased
professionalism on show from
lenders throughout the sector, and
the subsequent rise in intermediary
and borrower perception of a product
type which hasn’t always had the
best reputation.
The result is a sustained growth in
activity and enquiry levels, as evident
in recent Bridging & Development
Lenders Association (BDLA) data
which saw bridging completions
remain steady at £2.8bn in Q1,
matching the record set in Q4 2024.
That’s particularly impressive given
that Q1 is typically a quieter period,
but perhaps more telling is the 55.3%
quarterly surge in applications,
reaching £18.34bn.
If these convert, we’re likely to see
continued momentum well into the
second half of the year.
The long game
However, it’s important to keep in
mind that this surge in applications
doesn’t automatically translate into
approvals. Such applications need to
be carefully collated and packaged
effectively to ensure exit routes are
clear and supported by relevant, wellsupported evidence. In many cases,
a deal falls apart not because of the
property or borrower, but because the
exit wasn’t properly mapped out from
the outset.
This is where specialist packaging
partners can really prove their
worth. By supporting brokers and
their clients to define, document,
and validate their exit strategies,
we can significantly improve the
chances of both approval and timely
completion.
It’s not just about geing a
decision in principle (DIP), it’s about
understanding the long game in
DONNA FRANCIS
is managing director at Envelop
Foresight can
save a deal and, more
importantly, it can
protect the client’s [...]
financial position”
terms of planning for valuation
risks, mortgage affordability at
exit, or potential market volatility.
That foresight can save a deal and,
more importantly, it can protect the
client’s deposit, opportunity, and
financial position.
Bridging finance is fast, flexible,
and becoming increasingly
mainstream, but this is only the
case if the lender believes in the
borrower’s ability to exit. With the
cost of failed deals on the rise, and
bridging demand reaching new highs,
brokers must prioritise clear, credible
exit strategies from day one. Because
in this market, no exit oen means
no entry. ●
August 2025 | The Intermediary
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