Bridging finance

Business bridging loans

A business bridging loan covers the gap between a payment you are committed to and money you are certain to receive. HomeSec funds bridging finance from $20,000 to $5,000,000 against property security, with no repayments for up to six months and settlement in as little as 24 hours. The loan is repaid from the event that closes the gap — a sale, a refinance or a settlement.

A city bridge lit at dusk, with the skyline behind it

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The three gaps we fund most

The settlement that moved

You have exchanged on a purchase and the sale funding it has been delayed. Penalty interest is accruing, the vendor's solicitor is writing letters, and your bank cannot re-cut the facility inside the deadline. Bridging covers the shortfall and is repaid on the day the other transaction settles. Because our term is open, a settlement that moves again does not turn a performing loan into a default.

The refinance stuck in credit

Your new lender has issued conditional approval but the file is sitting in valuations or credit, and your existing facility expires first. This is the most common bridging file we write, and the most straightforward, because the exit is documented before we start.

The progress claim that was not paid

Construction is where timing risk concentrates: a claim certified but not paid, retention held past practical completion, a variation in dispute while wages fall due on Thursday. Bridging against the director's property covers the payroll while the claim is resolved.

What we look for

An exit that is dated and documented. A signed contract of sale, a formal letter of offer from an incoming lender, a certified progress claim. "The property should sell in the new year" is a hope, not an exit, and we will say so.

What counts as an exit

A bridging file is assessed on one question more than any other: what repays it, and when. Here is how we read the common answers.

The exit	Bridgeable?	Why
A signed contract of sale on a property	Yes	The strongest exit there is. The date is in the contract.
A formal letter of offer from an incoming lender	Yes	Conditional approval in writing. We bridge to the bank's settlement.
A certified progress claim	Yes	Certified by the superintendent; payment is a matter of when.
A dated receivable from a creditworthy payer	Yes	A contract milestone, a government payment, an insurance settlement in writing.
A property that is listed and on the market	Usually	Depends on the market and the price. We assess it honestly and say what we think it will do.
An intention to list, sell or refinance	No	A hope is not an exit. We will say so rather than write it and watch it fail.
Future trading profit	No	That is a working-capital loan, not a bridge, and it is assessed differently.

How much you can borrow

Take the value of the property you already own, multiply by 80% for residential or 70% for commercial, and subtract what is owing on it. What is left is roughly the bridge available, between $20,000 and $5,000,000.

Worked positions

The bridge	Security value	Existing loan	Ceiling	Available
Bridging a purchase: shortfall against the home	$1,200,000	$520,000	80% — $960,000	$440,000
Bridging a refinance: bank loan expired, new one in credit	$2,000,000 (commercial)	$900,000 paid out	70% — $1,400,000	$500,000
Bridging a sale: investment property under contract	$780,000	$300,000	80% — $624,000	$324,000
Bridging a claim: builder's home while the claim is chased	$950,000	$610,000	80% — $760,000	$150,000

Indicative only. Value is our own assessment of the security, not a formal valuation.

From the call to the money

Tell us the deal

Amount, purpose, timing, the property and how the loan gets repaid. A Lending Manager gives you an indicative answer on that call — usually in minutes.

Minutes

Conditional approval

Photo ID, a rates notice and your most recent mortgage statement. That is the whole list, and it takes about fifteen minutes.

About 15 minutes

Funds released

As little as 24 hours from a clean, complete scenario. Paid where you tell us — to your account, or straight to the ATO.

As little as 24 hours

Bring the exit document to the first call — the contract, the letter of offer, the certified claim. It is the one thing a bridging file needs that a plain equity release does not, and it is what lets a Lending Manager give you the answer on the call.

Why the open term matters most here

Bridging is the product where a fixed term does the most damage. The whole premise is that you are waiting on someone else — a purchaser, an incoming lender, a superintendent certifying a claim — and none of those people are working to your loan's maturity date.

A lender that fixed your term at three months has a default on its hands when the settlement slips a fortnight, and you have penalty interest and an extension fee on yours. We do not fix it. Tell us it has moved and we move with it, at no cost. More on why we do not fix the term.

Bridging finance and consumer credit — the line

HomeSec's bridging finance is business-purpose lending. If you are an individual bridging between selling your home and buying the next one, that is regulated consumer credit and a different product from a different kind of lender — several Australian lenders do it well and publish comparison rates. We will point you to them rather than write something that does not fit.

What it costs

Priced per file, on the property, the position, the amount and the exit. No rate is published, because a rate with "from" in front of it is the best file's number. How it is priced, and every fee that exists.

✓Upfront: a small commitment fee, payable only once your loan is conditionally approved

✓Valuation fee: none — we don't use valuers

✓Fee to extend: none — no rollover fees, legal fees or rewriting the loan to extend

✓Early repayment: none — repay early and save the interest

Questions we get on the phone

What if my settlement date moves again?

Tell us. There is no fee to extend and most extensions are handled in a single phone call. This is the single most common thing that happens on a bridging file and it is why our term is open.

Can you bridge before my property is even listed?

Sometimes, but the exit has to be credible. A signed contract or a formal letter of offer is an exit. An intention to list in the new year is not, and we will tell you so rather than write it and hope.

Do you need a valuation?

No. We assess value on our own view of the security. That removes both a cost and roughly a week from the process.

What is a business bridging loan?

Short-horizon funding between a payment you are committed to and money you are certain to receive — a settlement, a refinance, a certified claim, a dated receivable. It is secured by property you already own, repaid from the event it bridges to, and at HomeSec it has no fixed term, because the event is on someone else's calendar.

How long can a bridging loan run?

As long as the exit takes. open — you choose — from one month, with no maximum, no penalty for repaying early and no fee to extend. A bridge written for six weeks that takes ten is not a default here; it is a phone call.

Is a bridging loan interest-only?

Your choice: interest-only, or interest capitalised for up to 6 months. Most bridging borrowers capitalise the interest, so nothing falls due until the exit arrives and the whole balance is cleared from it in one payment.

How much can I borrow on a bridge?

Up to 80% of a residential property's value or 70% of a commercial one, less what is already owing on it, between $20,000 to $5,000,000. The worked table on this page shows four typical positions.

Can you bridge a commercial property purchase?

We can fund the purchase of a commercial property, in a personal name or a company name, and the purchase of a residential property in a company name. We cannot fund the purchase of a residential property in a personal name: credit for that purpose is regulated consumer credit under the NCCP Act, and HomeSec lends for business and investment purposes only.

What is the difference between bridging finance and a caveat loan?

Purpose and instrument. Bridging describes why you are borrowing — to reach a dated exit. A caveat describes how the loan is secured. A bridging loan can be secured by a caveat, a second mortgage or a first mortgage; which one depends on what is already on the title and how fast the money is needed.

Bridging loan vs a bank bridging product — what is different?

A bank bridging loan is usually a consumer product for someone selling one home and buying the next, with a fixed term, a valuation and a serviceability test on the end debt. Business bridging here is assessed on the property and the exit, needs no valuation or financials, has no fixed term and funds in days. Different product, different purpose — and if yours is the consumer kind, we will say so.

Talk to a Lending Manager

Tell us the amount, the purpose and what property is available, and we will tell you which instrument fits and what it costs. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.

Related situations and loans

Settlement shortfall Refinance stalled in credit Bridging a property settlement Second mortgages First mortgages No doc business loans Commercial loans Fast business loans Start-up business loans

Sixty seconds, no documents

See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualify Call 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Reviewed by Jason Brockmuller, Joint Chief Executive