Direct answer
A bridging loan covers the gap between buying one asset and selling or refinancing another, or between agreeing to an acquisition and completing the longer-term funding behind it. In Australia it is typically secured by a first or second mortgage over residential or commercial property, runs three to twelve months, and can be funded in as little as three to fourteen business days through banks, private lenders and specialist funds.
Who uses it and why
Bridging finance exists for the moment when the right opportunity and the available cash do not arrive at the same time. A property investor finds the next asset before their existing property has sold, and does not want to lose it to another buyer while a conventional sale process runs its course. A developer needs to settle on a site while a bank refinance on a completed project is still working its way through approval. A business owner has agreed terms on an acquisition that needs to complete on a set date, well before a term facility with a bank could realistically be arranged and settled.
In each case the borrower has a clear, near-term source of repayment — a sale, a refinance, or the incoming facility that will eventually take the bridge out — and needs capital to hold the position until that source arrives. This is different to a general working-capital need: a bridging loan is built around a specific transaction and a specific, dated exit, and it is priced and underwritten on the strength of that exit as much as on the security itself. Typical borrowers include property investors and developers, business owners buying before they sell, and companies completing an acquisition ahead of permanent finance being in place.
The appeal of bridging finance is that it turns a timing problem into a financing problem, which is generally the easier of the two to solve. Rather than walking away from an opportunity because the borrower's own cash is temporarily tied up in another asset, a bridge lets the transaction proceed on its own timetable while the borrower's longer-term position — a sale campaign, a refinance application, permanent acquisition funding — runs in parallel and eventually closes out the facility.
What lenders look at
The exit is the first thing every lender on the panel examines, because a bridging facility is only ever as sound as the event that repays it. A contract of sale already exchanged, a refinance formally approved and awaiting settlement, or a signed acquisition agreement with funding already lined up all read as strong exits; a bridge built on "we expect to sell soon" with no campaign underway is a much harder file to place, whichever lender is approached.
Security typically takes the form of a first or second mortgage over the property being bought, the property being sold, or both, and lenders will lend to a loan-to-value ratio typically in the order of 65–75%, informed by the strength of the exit as much as the asset itself. Banks tend to want the exit and serviceability documented in full — settled contracts, formal refinance approval, full financials — and will move at a bank's pace even on a bridging product. Private lenders and specialist funds will often work from a less complete picture, placing more weight on the equity position and a credible narrative around the exit, and can generally move faster as a result.
Serviceability is assessed differently depending on structure: some bridges are serviced with monthly repayments through the term, while others capitalise interest so the borrower carries no repayment burden until the exit event. Credit history is read with real flexibility — lenders on this panel will consider applicants with defaults on file, provided the security and exit tell a coherent story — though it is weighed alongside the transaction rather than ignored outright.
Documentation requirements track the lender type as much as the borrower's file: full-doc evidence generally supports the sharpest pricing and the largest facilities, while alt-doc and low-doc structures remain available where the security and exit are strong enough to carry the file without a complete financial picture. Entity structure — company, trust or individual acting for business purpose — is confirmed early, since it shapes which lenders on the panel are the right fit and what guarantees will be required.
Typical terms
|
|
| Size |
$200,000 to $20m+, subject to lender assessment |
| LVR |
Typically up to 65–75% |
| Term |
Three to twelve months |
| Speed |
Indicative funding in 3–14 business days from a complete application |
| Security |
First or second mortgage over residential or commercial property |
| Pricing |
Priced on risk and security; indicative range on enquiry |
Structures we see most
Peak debt bridge. The borrower holds both the departing and incoming properties simultaneously, with the loan sized against the combined equity across both assets. Used when the incoming purchase must settle before the existing property is sold.
Serviced (end debt) bridge. Monthly interest is paid through the term, keeping the balance owing steady until the exit, which suits a borrower with the cash flow to service the facility and who prefers not to see the balance grow.
Capitalised-interest bridge. Interest is added to the loan balance rather than paid monthly, which suits a borrower whose cash is tied up until settlement and who would rather manage one larger repayment at the exit than a series of monthly ones.
Acquisition bridge. Funds an agreed business or asset acquisition ahead of permanent finance being arranged, used where the deal timetable is shorter than a term facility could realistically accommodate, with the bridge taken out once that permanent funding settles.
Sale-and-settle bridge. Structured around an exchanged contract of sale on the departing property, with the bridge sized and timed to match the sale's settlement date, generally the most straightforward version of the structure to place.
Costs and how we're paid
Pricing on bridging loans reflects the term, the strength of the exit, the security offered and which type of lender is the best fit, and is quoted on enquiry once the file has been reviewed — there is no flat rate that applies across every bridge. Facilities may carry an establishment fee and, where interest is capitalised, a facility limit that accounts for the growing balance; all costs are set out in the loan offer before a borrower commits.
Solara is remunerated by the lender, the borrower, or both, depending on structure, which may include a commission from the lender and/or a broker fee agreed with the borrower. Any commission or fee is disclosed in writing before an application proceeds.
Process and timing
- Initial scoping call — typically same day. We confirm the transaction, the exit, the security available on both sides of the bridge, and the timeframe.
- Document collection — typically 1–2 business days. Contracts, title information, evidence of the exit (a signed sale contract, refinance approval, or acquisition agreement) and financials appropriate to the doc level.
- Lender matching and submission — typically 1–2 business days. We place the file with the banks, private lenders and specialist funds whose appetite best matches the exit and timeframe.
- Approval and offer — typically 2–7 business days, faster with private lenders and specialist funds, longer where a bank is the right fit.
- Documentation and settlement — typically 1–3 business days once terms are accepted and security is registered.
Frequently asked
What is a bridging loan?
It is finance that covers the gap between buying one asset and selling or refinancing another, or between agreeing to an acquisition and having permanent funding in place. It is secured by property and priced around the strength of the exit that will repay it.
Do I need to have sold my property before I can get a bridging loan?
No. Bridging finance exists specifically for situations where the sale has not yet completed. A peak debt structure allows a borrower to hold both properties, with the facility sized against the combined equity, until the departing property sells.
What happens if my property doesn't sell within the bridging term?
This is why the exit is assessed so closely upfront — lenders want a credible campaign or contract in place before settling the loan. If a sale is genuinely delayed, borrowers should engage their lender early to discuss an extension or a refinance rather than waiting until maturity.
What's the difference between a peak debt and an end debt bridge?
A peak debt bridge holds both properties at once and is sized against their combined value; an end debt (serviced) bridge assumes the departing property is sold relatively quickly and the borrower services the loan in the meantime. The right structure depends on the borrower's cash flow and how confident the sale timing is.
Can a bridging loan fund a business acquisition?
Yes. An acquisition bridge is used where a deal needs to complete on a set date ahead of permanent finance being arranged, with the bridge repaid once that longer-term facility settles.
How fast can a bridging loan be funded?
Indicative funding runs from around three to fourteen business days depending on the lender and how complete the file is. Private lenders and specialist funds are typically faster than banks for this product.
Can I get a bridging loan with a default on my credit file?
Often, yes. Bridging lenders on this panel will consider applicants with defaults, provided the security and exit are strong enough to support the file. It is assessed case by case rather than filtered automatically.
Is interest paid monthly or added to the loan?
Both structures are used. A serviced bridge involves monthly interest payments; a capitalised-interest bridge adds interest to the balance so nothing is paid until the exit. Which suits a given borrower depends on their cash flow during the bridging period.
Related products
Short-term business loans — the better fit when the need is broader working capital, a tax debt or an opportunity rather than a specific property purchase-and-sale transaction.
Second mortgages — worth considering directly when the requirement is releasing equity from an existing property rather than funding a specific purchase-and-sale bridge.
Private first mortgages — the closer fit where the borrower needs a longer-dated first mortgage rather than a short bridging facility, particularly once the exit event has already occurred.