Getting finance when you’re self-employed can feel like an uphill battle.
High street banks dislike variable income patterns, leaving many business owners and freelancers watching opportunities slip through their fingers. Property deals won’t wait for three years of perfect accounts.
This is where bridging finance steps in.
For self-employed borrowers, it offers a path to quick capital with criteria that focusses more on your property assets and less on your income history.
Whether you’re a sole trader, company director or contractor, bridging loans can help you move quickly on property deals, manage cash flow gaps or seize time-sensitive opportunities.
In this guide, we’ll explore how bridging finance works for self-employed people, what lenders look for, and how to improve your chances of approval.
What is Bridging Finance?
Bridging finance is a short-term loan secured against property or land.
Bridging loans are temporary, usually lasting between 3 and 12 months.
They’re designed to help you ‘bridge’ a funding gap – perhaps between buying a new property and selling an existing one, or between purchasing a property at auction and arranging longer-term finance.
For self-employed borrowers, bridging loans offer distinct advantages over traditional lending.
The key difference is instead of scrutinising years of accounts and income stability, lenders assess the value of the property being used as security and your plan for repaying the loan (known as the exit strategy).
They are lending for the short-term only, so your income position is not that relevant.
When Bridging Finance Makes Sense
This makes bridging finance particularly useful if you’re self-employed and:
- Need to move quickly on a property purchase
- Have an irregular income pattern
- Haven’t been trading long enough for traditional mortgage approval
- Want to buy an unmortgageable property to renovate
- Need to release equity from your property assets quickly
- Face a short-term cash flow gap in your business
Amounts can range from £150,000 to several million pounds, with loans secured against residential, commercial or mixed-use properties.
Lenders are also flexible enough to lend against more than one property, perfect if one property doesn’t quite have enough equity for what you need.
The speed of arrangement is another benefit, bridging finance can be arranged in days or weeks.
How Self-Employed Borrowers are Assessed
When you apply for bridging finance as a self-employed person, lenders take a different approach compared to high street banks assessing a mortgage application.
Instead of looking mainly at your income and affordability, bridging lenders prioritise the property’s value, the loan to value (LTV) and how you will repay them.
This shift makes bridging finance more accessible if you have variable earnings or limited trading history.
Property Assessment
The security property forms the foundation of the assessment. Lenders will consider:
- The current market value
- The type and condition of the property
- Its location
- How easily it could be sold if needed
Loan-to-value (LTV) ratios indicate what you could borrow compared to the property’s value.
For self-employed borrowers, lenders might offer up to 75-80% LTV, though this varies depending on your circumstances and the property type.
So if you are buying a £500,000 property, a 75% LTV loan could provide £375,000.
Refurbishment Projects
Refurbishment bridging loans are a popular way to fund the purchase of a property, along with the refurbishment costs.
Here, the lender will be looking at what the property is worth now, your refurb plans and the finished value.
Read more:
Let’s talk bridging loans!
Understanding Non-Status Lending
Non-status lending represents a significant advantage for any borrower struggling with rejected applications. But what exactly does this term mean?
In simple terms, ‘non-status’ means that your income situation, affordability and credit status are basically ignored.
So instead of proving you can afford the loan through regular income, the property itself becomes the primary consideration.
This isn’t about lending to people with no income though.
Rather, it’s recognising that income for some people can be complex, variable or hard to document in conventional ways. The security property provides the lender with reassurance instead.
Who Might Need A Non-Status Loan?
In truth, bridging lenders aren’t that fussed about how much income you have, or how much you can prove.
The loan durations are too short for this to have any meaningful impact. And most don’t require monthly payments anyway.
The main benefit is for people with issues on their credit file. Without a credit check or credit score, the bad credit problems won’t harm your application.
But removing the need for any credit checks also makes the application process that much quicker, which will be important if you are in desperate need of funds.
The trade-off is a slightly higher interest rate compared to status-based lending, reflecting the different risk assessment and a max LTV of around 75%. As always, you’ll also need a strong exit strategy, as lenders need to know how you’ll repay the loan at the end of the term.
Non-status doesn’t mean no questions asked – you’ll still need to show the loan makes financial sense and that you have a workable plan to repay it.
Read more:
Exit Strategy Planning
Your exit strategy is an explanation of ‘how’ you plan to repay the bridging loan.
It is perhaps the most important element of your application as a self-employed borrower.
Without a clear and convincing exit plan, even the strongest application can fail.
An exit strategy isn’t just a formality – it shows the lender how and when their money will be returned. They will read it in full and query any aspects they are unsure of.
Common Exit Strategies
Common exit strategies for self-employed borrowers include:
Selling the property is the most straightforward approach. If you’re developing or refurbishing a property, your exit might be selling it at a higher value once work is complete. Lenders will want to see evidence that your sale expectations are realistic, perhaps through comparable property sales in the area.
Refinancing onto a longer-term mortgage works well if you’re using bridging finance to secure a property quickly or to make it mortgageable through improvements. You’ll need to show that securing longer-term finance will be feasible at the end of the bridging term.
Business income can form part of your exit strategy if you can demonstrate that your business will generate sufficient funds to repay the loan within the term. This might work for seasonal businesses or when you’re expecting payment for a major project.
Asset sales beyond the security property might form part of your plan – perhaps you have other properties or investments that will be liquidated to repay the loan.
Creating a Convincing Exit Plan
When developing your exit strategy, consider:
- How reliable is your proposed exit route?
- What’s your backup plan if the primary strategy faces delays?
- What evidence can you provide to support your exit timeframe?
- Are your financial projections based on realistic assumptions?
For example, a self-employed builder purchasing a run-down property might have an exit strategy of refurbishing it over six months, then selling it at a profit based on comparable sales in the area. Their backup plan might be refinancing onto a buy-to-let mortgage if the sale takes longer than expected.
Conversely, a borrower using a non-status bridging loan may struggle to convince a lender they will exit the bridge by remortgaging.
Lenders assess exit strategies based on clarity, realism and your track record with similar projects or financial management.
The more evidence you can provide to support your plan, the stronger your application will be.
Read more: Creating Winning Exit Strategies for Bridging Loans
Alternative Options
Bridging finance isn’t always the right answer for every situation. It’s quick and convenient but comes with higher rates and fees.
As a self-employed borrower, you should explore all your options to find the best fit for your specific needs.
Specialist Mortgage Products
If you are buying with the aim of keeping, then maybe start off with a self-employed mortgage.
The specialist mortgage market has grown significantly in recent years, with many lenders now offering products specifically designed for self-employed professionals.
Unlike mainstream lenders who might insist on three years of accounts, these specialist providers may accept just one year’s trading figures or consider retained profits within your company.
Business Finance Alternatives
If you’re looking to fund business premises, a commercial mortgage will be more suitable than bridging finance, as it provides long-term funding. The application will be based on your company’s financial position but will also take a number of weeks to be approved.
For business equipment or vehicles, asset finance often provides a more straightforward solution than property-secured loans. This allows you to spread the cost of essential business assets while keeping your property options open for other opportunities.
Second charge loans can be useful when you already have a mortgage but need additional funds.
You keep your existing mortgage in place – particularly valuable if you have a competitive rate – and take out a separate loan secured against your equity in the property. With terms typically ranging from 5-25 years, these can offer more breathing room than bridging loans.
For larger projects, especially property development, mezzanine finance bridges the gap between traditional lending and equity investment. While more expensive than standard loans, it can provide the additional capital needed to make projects viable when traditional lending isn’t sufficient.
Making the Right Choice
When comparing these options against bridging finance time sensitivity is often the deciding factor.
If you need funds within days or weeks, bridging finance usually wins the race.
Short-term needs (under two years) often align well with bridging finance, while longer-term requirements will normally be better served by specialist mortgages.
The strength of your exit strategy should influence your decision. If you have a clear, viable route to repay a bridging loan, it might be the simplest option despite higher monthly costs.
In lots of cases a staged approach works best.
A property developer might use bridging finance to purchase and renovate a property quickly, then refinance onto a buy-to-let mortgage once the work is complete and the property is tenanted.
A good broker can help you understand these options, sometimes combining different finance types to create a bespoke solution that matches your exact needs.
The Value of Working with a Specialist Broker
Trying to research bridging finance as a self-employed borrower can be complex, which is why working with a specialist broker often makes a significant difference to both approval chances and loan terms.
Broker value comes from several key areas:
Access to More Options
Specialist brokers have access to a much wider range of lenders than you could reach directly, including private banks, family offices, and wealthy individuals who don’t advertise to the public. Many of the most competitive lenders only accept applications through broker channels.
Expert Presentation of Your Case
They understand how to present applications in the most favourable light.
Brokers can save you considerable time by approaching only the lenders whose criteria match your situation. Without this guidance, you might waste weeks applying to unsuitable lenders, potentially harming your credit profile with multiple searches.
Better Terms and Support
They negotiate terms on your behalf, often securing better interest rates, higher loan-to-value ratios, or more flexible conditions than you might achieve directly.
Their relationship with lenders can make the difference in borderline cases.
A good broker provides support throughout the process, handling paperwork, chasing progress, and resolving any issues that arise. This proves particularly valuable for busy self-employed people who can’t afford to spend hours on application admin.
For example, a self-employed consultant seeking bridging finance for a quick property purchase might find a broker can secure terms from a private lender at 65% LTV when direct lenders were only offering 50%.
The difference could determine whether the purchase goes ahead.
When choosing a broker, look for one with specific experience in both bridging finance and self-employed borrowers. Ask about their lender panel and check they have access to a wide range of options, not just a handful of lenders.
Read more: Why Use a Bridging Loan Broker?
Common Misconceptions
Several persistent myths about bridging finance can prevent self-employed borrowers from considering this option, so let’s address these head-on.
“It’s Only for Property Developers”
Many people believe bridging finance is only for property developers or the very wealthy. In reality, it’s used by all kinds of self-employed professionals from consultants to tradespeople when they need quick, asset-based finance without income hoops to jump through.
“You Need Perfect Credit”
Another common misunderstanding is that you need perfect credit to access bridging loans. While good credit helps, bridging lenders place more emphasis on the property security and your exit strategy than your credit score. Some adverse credit can often be acceptable if explained.
“It’s Not Properly Regulated”
Some worry that bridging finance isn’t properly regulated. In fact, bridging loans secured against your home are regulated by the Financial Conduct Authority, offering similar protections to traditional mortgages. Even unregulated bridging loans (for business or investment properties) come from legitimate lenders with clear terms.
“It’s Always Extremely Expensive”
The perception that bridging finance is always extremely expensive can also be misleading. While interest rates are higher than standard mortgages, the short-term nature means the total cost may be reasonable for the right situation, especially when opportunity cost is considered.
“It’s a Last Resort Option”
This will be true for some but in reality, many experienced property professionals and business owners use them strategically as a first choice for speed and flexibility.
The UK bridging market has matured significantly, with increased competition driving both improved service levels and more competitive rates. What was once considered a niche product is now mainstream, with lending standards that are robust yet pragmatic.
Next Steps
Being self-employed shouldn’t limit your property finance options.
Bridging loans offer a practical solution when other lenders say no or move too slowly, focusing on your property assets rather than income history.
If you’re considering bridging finance, start by assessing your property’s current value – this forms the foundation of your borrowing capacity. Next, develop a clear exit strategy, as this will be central to your application’s success.
Speak to a specialist broker with experience in self-employed bridging finance. They can help identify suitable lenders, structure your application effectively, and secure better terms than going direct.
Remember that bridging finance is just one tool in the financial toolkit.
Sometimes it’s the perfect solution; other times, alternatives might work better. A good broker will give honest advice about what’s most appropriate for your situation.
FAQ
Most bridging loans can be arranged within 1-2 weeks, often faster. The exact timeframe depends on property complexity, your documentation readiness, and legal work. This is significantly faster than traditional mortgages, which can take months for self-employed applicants.
Our minimum loan size is £150,000.
No. While good credit helps, bridging lenders focus more on the property’s value and your exit strategy than your credit score. Minor credit issues can often be acceptable if explained, though very serious credit problems may affect your options or rates.
Non-status lending focuses on the property’s value rather than your income status.
This benefits self-employed borrowers because lenders don’t require any income proof. It’s particularly helpful for those with complex income structures, recently self-employed individuals, or those with income that doesn’t reflect their true financial position.
Bridging loans secured against your home are regulated by the Financial Conduct Authority (FCA). Loans for business or investment properties are typically unregulated, though they’re still provided by legitimate lenders with clear terms and conditions.
Yes. Being recently self-employed isn’t a barrier if you have a good property as security and a clear plan for repaying the loan.
Most property types can be considered, including residential, commercial, mixed-use, and land. However, some very specialised properties (like petrol stations or certain leisure facilities) may have fewer lender options. Properties in poor condition can still be accepted, often at a lower loan-to-value ratio.
Yes. Business bridging finance works well for commercial property purchases or refinancing. It’s particularly useful if you need to complete quickly, want to refurbish before arranging long-term finance, or if your business doesn’t meet traditional commercial mortgage criteria yet.
