Developers and investors often need access to multiple sources of finance simultaneously.
You might be midway through a renovation project when an unmissable opportunity appears, or perhaps you’re expanding your portfolio across different regions.
The good news? You can have more than one bridging loan at once – it’s a common practice among property professionals who manage multiple projects.
Let’s take a look at how this could work.
How Property Professionals Use Bridging Loans
The flexibility of bridging finance makes it particularly valuable when you’re juggling several projects.
A landlord in Birmingham recently used one bridge to fund a quick refurbishment while securing another to purchase an auction property in Manchester. Meanwhile, a London-based developer maintained three separate bridging loans to keep their conversion projects moving forward across different sites.
These scenarios highlight how bridging finance adapts to different needs.
Business owners also benefit from this flexibility – one might use a bridge to acquire new premises while another covers immediate business expansion costs.
Each situation brings its own considerations, but the underlying principle remains: bridging loans can work in parallel when structured correctly.
Securing Additional Finance Against Your Property
When you’re looking to raise more funds against a property that already has a bridging loan, you’ll enter the world of second and third charge lending.
Your first loan sits as the ‘first charge‘ on your property, with any subsequent borrowing taking second or third position.
Here’s how it works in practice:
A property investor in Leeds owned a commercial building valued at £750,000 with a first charge bridge of £400,000. They secured a second charge bridging loan of £150,000 to fund improvements, keeping well within lender LTV limits while maintaining clear exit strategies for both loans.
You’ll need your existing lender’s formal permission for additional loan charges. Most lenders are OK with this, although it is possible for a lender to refuse.
If this happens you will be unable to move forward with a second charge loan. In these circumstances an equitable charge loan can be a useful alternative.
Lenders view second and third charge loans differently because they’ll only recover their money after prior charges are settled – this usually means higher interest rates, reflecting the increased risk.
Let’s talk bridging loans!
Understanding Legal Charges
When you borrow money against a property, the lender places what’s called a ‘legal charge’ on it.
Think of this charge as a legal claim on your property that gives the lender security for their loan. It’s officially recorded at the Land Registry and establishes the order in which lenders would be repaid if you ever defaulted on your loans.
First Charge Explained
A first charge is exactly what it sounds like – the first loan secured against your property.
Your standard mortgage is usually a first charge loan. The first charge lender has priority over any other lenders if the property needs to be sold to repay debts. They’re first in line to get their money back, which is why first charge loans can offer better interest rates.
For example, if you buy a property worth £500,000 with a £300,000 mortgage, that mortgage lender holds the first charge. They have first claim on the property’s value up to the amount you owe them.
Second Charge Lending
A second charge comes into play when you take out another loan against a property that already has a first charge. It doesn’t matter whether the first loan is a mortgage or a short term bridge.
The second charge lender only gets repaid after the first charge lender has received their full amount. This higher risk position is why second charge loans often come with higher interest rates.
Using our previous example, if you later took out a £100,000 bridging loan as a second charge on your £500,000 property, this lender would only get repaid after the mortgage lender’s £300,000 was settled.
Why Charges Matter for Multiple Loans
Understanding how charges work becomes important when you’re planning to take out multiple bridging loans.
You can have additional charges on one property or separate first charges on different properties.
Each approach has different implications:
Multiple Charges on One Property
- You’ll need permission from your existing lender to add another charge
- Each subsequent charge typically comes with higher interest rates
- You must have sufficient equity remaining in the property
Separate First Charges
- Each property can have its own first charge loan
- Generally offers better interest rates than multiple charges on one property
- Gives you more flexibility with different lenders
Lenders will look closely at the existing charges on your property before offering additional lending. The amount of equity available after accounting for existing charges directly affects how much more you can borrow and at what rate.
Related reading: A Guide to Cross Charge Bridging Loans
Building a Portfolio with Multiple Bridging Loans
Using separate bridging loans for different properties often proves more straightforward than multiple charges on one asset.
This approach lets you match each loan to specific project timelines and keep your exit strategies clear and separate.
Take the case of a Manchester-based investor who used three distinct bridges:
- one for a quick flip in Liverpool
- another for a residential conversion in Sheffield
- and a third to secure a commercial opportunity in Leeds
Each loan had its own security, timeline, and exit plan, spreading risk across the portfolio. They can all be with different lenders.
This strategy works particularly well when you’re active in different market segments or regions.
If one project faces delays, others might complete ahead of schedule, helping balance your overall position. The key is maintaining sufficient equity in each property and having robust plans for loan repayment.
Managing Multiple Bridges
Managing several bridging loans demands rigorous planning and clear oversight.
Each loan will have its own deadlines, interest calculations, and repayment requirements. You’ll need to coordinate various professional services – valuers, solicitors, and surveyors – while keeping track of different fee structures and payment schedules.
Successful borrowers often create detailed timelines for each project, planning their exits carefully.
For example, if you’re selling properties to repay loans, consider staggering completion dates to avoid flooding your local market. Always maintain contingency plans – if a sale falls through or a refinance takes longer than expected, you’ll want backup options ready.
Finding the Right Finance Mix
Before committing to multiple bridging loans, consider whether alternative finance structures might better suit your needs.
Portfolio bridging loans can streamline the process when you’re buying several properties in quick succession, potentially reducing both paperwork and costs.
Development finance should prove more cost-effective for larger renovation projects, offering staged payments that match your build schedule.
Many successful property professionals combine different types of finance – perhaps using bridging loans for quick purchases while arranging development finance for longer-term projects.
Related reading: Development Finance Staged Payments: How Do They Work?
Expert Support Makes the Difference
Working with a specialist broker transforms the process of arranging multiple bridging loans.
Their market knowledge helps identify lenders who’ll understand your strategy, accessing options unavailable on the high street.
More importantly, they’ll help structure your borrowing efficiently, perhaps suggesting different lenders for different projects to optimise your terms.
Your broker can coordinate multiple applications, ensuring paperwork flows smoothly and deadlines align. They’ll also help plan exit strategies and identify potential challenges before they arise, making them an invaluable partner.
Moving Forward with Multiple Bridges
If multiple bridging loans feature in your property plans, start by mapping out your current portfolio position and future objectives.
Consider how different projects might interact and how you’ll manage various repayment schedules. A conversation with a specialist broker will help clarify your options and identify the most effective approach for your situation.
FAQ
Yes, you can have multiple bridging loans running simultaneously. This can be either as additional charges on the same property or as separate loans secured against different properties. UK lenders will assess each application based on your experience, available equity, and exit strategy.
There’s no fixed limit on the number of bridging loans you can have. The main factors are having sufficient security for each loan and demonstrating you can manage multiple commitments effectively.
Your existing bridging loan won’t be directly impacted, but you’ll need permission from your first charge lender to add another charge. Lenders consider your total commitments when assessing new applications, which might influence the terms offered.
Yes, using different lenders is common and sometimes advantageous. It can help maximise your borrowing potential and might give access to better terms. A broker can help coordinate between different lenders effectively.
Yes, you’ll need legal representation for each loan. Most lenders require separate solicitors to handle different loans, even when they’re with the same lender, to ensure each loan’s security is properly managed.
Read more: Do You Need a Solicitor for a Bridging Loan?
Yes, many investors use limited companies and SPVs for bridging loans. This can offer tax advantages and help protect personal assets. Some lenders specialise in corporate borrowing.
With a second charge bridge the maximum LTV is 70%. Multiple loans secured using a first charge can usually be arranged up to 80% LTV.
