What Is a Bridge Loan?

GOGOPROP
Property Guides
April 3, 2025
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A bridge loan is a short-term financing option designed to help individuals and businesses manage cash flow during transitional periods. It provides immediate funds to cover a financial gap until long-term financing or the next phase of funding is secured.

In the UK, bridge loans are particularly popular in property transactions. Understanding the meaning of a bridge loan is crucial for investors looking to capitalise on fast-moving opportunities as it enables buyers to act quickly in competitive markets. 

What Are the Types of Bridge Loans?

Bridge loans come in two main forms:

Open Bridge Loan

An open bridge loan has no fixed repayment date. Borrowers typically repay the loan once they secure funds from another source, such as selling a property or securing a mortgage. This is ideal for buyers who need flexibility as they finalise their next step in financing.

Closed Bridge Loan

A closed bridge loan has a set repayment date agreed upon in advance. Borrowers often use this type when they have a clear timeline for securing funds, such as a confirmed property sale. This type of bridge loan works best for buyers with defined schedules and predictable cash flow.

How Are Bridging Loans Different From Traditional Loans?

Unlike traditional loans that cater to long-term repayment and fixed plans, bridging loans fill immediate financial gaps. They usually provide asset-based, short-term funding and offer faster approval processes with repayment terms of a few months to a few years. 

On the other hand, traditional loans offer longer repayment terms of 10 to 30 years. They are usually credit-based, and loans take several weeks to months to process.

What Is a Bridge Loan Usually Used For?

The primary purpose of a bridge loan is to provide quick access to funds during financial transitions. For property buyers, it ensures they can secure deals without delays. Bridge loans are versatile and used in various scenarios, including these common applications:

  • Property Purchases: Bridging loans are often used to secure a property while waiting for the sale of another.
  • Auction Purchases: Buyers use short-term bridge loans to act quickly when purchasing properties at auction, where immediate payment is required.
  • Renovations: Investors use them to finance property refurbishments before refinancing or selling.
  • Business Needs: Companies may use bridge loans to cover operational expenses or invest in opportunities while waiting for long-term funding.

Advantages & Disadvantages of Bridging Loans Explained

A couple discussing how a bridging loan works

Advantages

What is the main advantage of a bridging loan? As mentioned, they typically have quick approvals. This means funding is available within days, allowing buyers to act quickly. Loan approval is asset-based, depending on the value of the collateral, making it accessible for buyers without a strong credit history. Repayment terms are designed to suit short-term timelines.

Disadvantages

Bridge loans typically have higher interest rates compared to traditional loans. They also have shorter repayment terms. Because they are asset-based, there is a risk of collateral loss due to non-repayment.

How Can Overseas Buyers Get a Bridge Loan?

Getting a bridge loan as an overseas buyer is a streamlined process when working with the right lender. Here is how to approach it:

  1. Identify a Reputable Lender: Work with digital lenders like GOGOPROP, who specialise in asset-based financing and cater to UK non-residents.
  2. Prepare Documentation: Provide property details and proof of funds for repayment.
  3. Asset Valuation: The lender evaluates the property to determine the loan-to-value ratio.
  4. Loan Agreement: Once approved, sign the agreement and receive funds within days.

How Can GOGOPROP Help With Bridge Loans?

GOGOPROP offers a fast, reliable, and flexible solution for overseas buyers seeking short-term bridge loans in the UK.

We offer fast approvals within 24 hours, processing within 5 days, and funding in as little as 10 days. Our digital lending services are ideal for Southeast Asian and UAE investors, offering asset-based loans that do not rely on UK credit history.

We offer flexible loan options for new property purchases and equity release on existing properties with competitive interest rates and transparent fees. We provide up to 60% loan-to-value and repayment terms from 3 to 12 months. 

Our fully digital application process is convenient and efficient, and we provide you with real-time updates on your loan progress. With our client-centred approach, we tailor financing solutions to individual goals to ensure high satisfaction and trust throughout. 

Looking for a fast, reliable, and flexible bridge loan to secure your UK property investment? GOGOPROP enables overseas buyers to secure properties in competitive markets without waiting for long-term financing. To know more about how a bridging loan works, contact us today.

GOGOPROP

When our family bought an electric cargo bike earlier this year, one of my biggest fears was that this lovely and expensive new machine was going to get stolen. So I got the best lock money could buy, and I started to investigate: did I need ebike insurance?

First, I called my homeowners insurance provider to see if they would cover the bike if it were stolen. To my surprise, because it’s an electric bike, not only did my policy not cover it, they wouldn’t even add it for an additional fee or sell me a separate policy for it, the way they did for our family car.

Instead they referred me to an insurance company that specializes in bikes and ebikes. I bought a policy from them and sleep a little better for it.

I’ve heard similar stories from other ebike owners. And I’ve heard worse.

What can happen without ebike insurance

The saddest stories are the ones where someone assumed their homeowners or renters or car insurance covered their ebike, and after it was stolen or seriously damaged, it turned out it wasn’t covered.

"And then there are the stories about people whose ebikes were covered by their homeowners policy, but their premium went way up when they made a claim for a stolen ebike."
<span class="blog-quote-name">-Kyle Miller, CEO Brass Hands</span>

Why it’s hard to insure an ebike

When it comes to insurance, ebikes land in a gray area outside standard homeowners insurance and auto insurance. Here’s why:

  • Ebikes are new in terms of the insurance industry. Most of the several million ebikes in the U.S. were purchased in the last two years. Insurers aren’t familiar with them, and insurers don’t like to be surprised by unfamiliar products.
  • Ebikes are more expensive than regular bikes. Policies that cover bikes, like most homeowners or renters policies, might have also covered ebikes until the insurer had to pay much larger claims than they expected to replace a damaged or stolen ebike. See above about insurers and surprise. So some policy terms got changed.
  • Finally, ebikes get stolen a lot, and not only from people’s homes. They are ridden and locked up outside all over the place, which makes them more vulnerable than other valuable household items.

Steps to take to properly insure your ebike

The odds that your ebike is covered by your existing insurance is lower than you may think. Here’s what to do to find out if you need ebike insurance:

  1. Call your insurance company and find out what they cover. Things to bring up: coverage of accidental damage, theft, and travel (like what would happen if you flew somewhere with your bike and the airline did a number on it). Does the insurance company consider your ebike a “luxury item”? If you’re happy with the coverage, great! You’re good to go.
  2. Consider bike-specific coverage. If you aren’t covered, or feel like the coverage you do have isn’t enough, here are some things to think about.

Bike insurance covers all kinds of bike specific things, not just theft. Think damage to the bike from a collision, medical payments if you are injured in a collision, insurance for the bike if you are traveling with it or racing it, or a bike rental while your bike is being repaired. Some policies even cover things like accessories (like bike lights and panniers) and riding clothes.

Bike claims won’t affect your other insurance premium. Should you need to make a claim on your ebike, your home insurance premium won’t change or get canceled.

We can help

Want to learn more about ebike insurance? Join Tempo and get easy access to insurance quotes, and other ways to protect your ebike right inside the app.

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