Bridging loans are very much part-and-parcel of commercial lending.

Although rates can be higher than standard, and fees are often chargeable, they can be an incredibly useful option for some clients seeking short-term funding.

You’ll be aware of the most common scenarios where bridging finance can give your clients valuable flexibility and breathing space, allowing them to move quickly to take advantage of short-term opportunities.

However, here are three less common scenarios where a bridging loan can make a real difference.

Although there are some signs that we might not yet be out of the woods, an economic “soft landing” – getting inflation under control while avoiding recession – is looking increasingly likely.

A recent report from Reuters suggests that the Bank of England (BoE) interest rate strategy may have worked, while a City A.M. article highlights analysts at Deutsche Bank who expect the UK to avoid a recession.

So, although the cost of living crisis has weighed heavily on household confidence and sentiment, the UK economy has actually defied forecasters’ earlier recession calls in 2023.

Demand in the UK economy remains reasonably buoyant due to several factors, including:

• The post-Covid release of demand into the market
• Supportive government fiscal policies, including recent National Insurance cuts in the chancellor's Autumn Statement
• A surprisingly resilient labour market, which is now finally delivering real wage increases to households.

These factors combined mean that the economy continues to add jobs even as wage growth has moderated, fostering an element of optimism that inflation can be curbed without a surge in unemployment.

Having said that, it’s likely that growth could be tepid as the repercussions of recent rate hikes continue to weigh on household spending and business investment.

The latest BoE report suggested that the cautious attitude towards cutting the cost of borrowing through fears of stoking inflation is likely to continue into the new year.

After a tumultuous period, inflation is poised to come closer to target levels than it has since 2021, possibly dipping below 3% in the first half of the year.

Domestically, the BoE interest rate strategy is playing a crucial role, with moderating wage growth and contractions in credit and money supply contributing to the anticipated fall in the rate of price rises.

Signs of this trend were already evident in the November inflation reading, which saw inflation go below 4%, well below expectations.

This precipitous fall can also be attributed to global factors, including cooling inflation worldwide – with deflation even noted in China's export prices – and stabilising commodity prices.

You’ll be as aware as we are that not all commercial loan arrangements are derived from clients with straightforward requirements.

For example, you may be dealing with a business that has a complex corporate structure, is not based in the UK, or is set up as a trust.

In these circumstances, it’s perfectly understandable that banks, or other commercial lenders, will be cautious and go through strict due diligence procedures before first agreeing to lend, and then actually releasing the funds.

In these cases, the availability of bridging finance as an interim borrowing solution can provide you and your clients with valuable leeway and peace of mind.

It can enable clients to move forward with the purchase, potentially taking advantage of an attractive business opportunity, while statutory checks and other loan underwriting requirements are carried out.

At Ortus, we can help facilitate bridging loans for terms of up to 36 months for clients who aren’t in a position to apply for bank funding.

Our analysts will look at the business proposition and offer a chance for it to stabilise before moving on to long-term finance.

We have a wide sector appetite which ranges from offices, industrial and light industrial to hospitality, leisure, and care homes.

Additionally, we can work with new-build commercial properties and often don’t require any previous trading history. We also don’t charge exit penalties for early refinance, should the asset reach stabilisation sooner than expected.

We can provide bridging loans on property all over the UK, including Northern Ireland.

Get in touch 

If you’d like to talk to us about bridging finance and how we can help you and your clients, speak to the Business Development Manager in your local office.