Planning for a Smooth Repayment
Bridging loans can be a powerful tool for investors, developers, and business owners needing short-term finance. But unlike traditional lending, bridging loans are designed to be repaid quickly, often within 6 to 12 months. That’s why having a clear and realistic exit strategy isn’t just helpful, it’s essential.
You can find below the most common exit strategies, what lenders are looking for, and how you can plan ahead to avoid delays, stress, or additional costs.
1. What Is an Exit Strategy?
An exit strategy is your plan for repaying the bridging loan at the end of the term. Lenders want to see this upfront because it shows how and when they’ll get their money back.
A strong exit plan gives lenders confidence and helps you secure better rates and terms.
2. Popular Exit Strategies for Bridging Loans
Here are the most common ways borrowers repay their bridging finance:
- Sale of the Property: You sell the asset used as security. Ideal for flips, auctions, or property chain delays.
- Refinancing: Switching to a long-term mortgage or commercial loan.
- Sale of Another Asset: Using funds from a separate sale (e.g., another property or investment).
- Cash Injection: Through business income, inheritance, or investor funding.
3. What Lenders Want to See
Lenders are risk-conscious, especially in 2025’s market. A strong exit strategy should:
- Be realistic (not based on best-case scenarios)
- Include a timeframe (with some flexibility)
- Account for market conditions (e.g. valuation changes or delays)
- Be backed up with documentation (sale agreement, mortgage DIP, etc.)
4. Common Mistakes to Avoid
- No formal plan in place
- Relying solely on uncertain asset sales
- Overvaluing the security property
- Not planning for potential delays
A good advisor will help you avoid these traps by stress-testing your exit plan.
At Cotterell & Cotterell Commercial Finance, our mortgage advisors work closely with clients to map out clear exit routes, find suitable lenders for your timeframe and property type and structure deals with flexibility where needed
We help ensure your bridging loan supports your long-term financial goals.
📞 Ready to secure bridging finance with confidence? Let’s have a chat.