What Is A Small Bridging Loan?
If you’re in need of fast, short-term finance but don’t require a large sum, you may be wondering: Do small bridging loans exist? The answer is yes, but they’re not always easy to find. While many lenders set their minimum bridging loan amounts at £100,000 or even £200,000 or more, there are specialist lenders (like us at Sunrise Commercial) who can arrange bridging loans as small as £5,000.
In this guide, we’ll explain what small bridging loans are, who they are for, and how to find the right lender.
What Are Small Bridging Loans?
A small bridging loan is a short-term finance solution for individuals, property developers, and investors who need access to a relatively small amount of capital quickly. Unlike standard bridging loans, which can often start at £100,000 or more, small bridging loans are designed to provide financial support for lower-value transactions.
These loans work in the same way as larger bridging loans: they offer short-term funding, secured against a property or asset, until a long-term financing solution (such as a mortgage or property sale) is in place.
Typical Use Cases for Small Bridging Loans
Small bridging loans can be useful in various situations, including:
- Buying a property at auction where a mortgage isn’t immediately available.
- Covering urgent renovation costs for a property that doesn’t qualify for traditional financing.
- Preventing a property chain collapse by providing temporary funding until a house sale completes.
- Short-term business finance, such as covering cash flow gaps.
Why Do Some Lenders Have High Minimum Loan Amounts?
Many mainstream lenders prefer to focus on large bridging loans because:
🔹 Higher loan amounts generate more profit – Lenders charge fees and interest as a percentage of the loan, making larger loans more profitable.
🔹 Processing costs remain the same – Whether the loan is £50,000 or £500,000, the time and effort required to process applications, carry out valuations, and complete legal paperwork is often the same.
🔹 Risk management – Lenders may see smaller loans as riskier because borrowers sometimes have fewer assets or alternative repayment options.
As a result, some lenders set their minimum loan amount at £200,000 or even higher—which is far beyond what many borrowers need.
Who Can Benefit from a Small Bridging Loan?
Small bridging loans can be the perfect solution for:
Property Buyers Needing a Quick Deposit – If you need a small amount to complete a property purchase before your main mortgage comes through.
Property Developers & Investors – Covering renovation costs, securing auction properties, or funding a small-scale development project.
Business Owners & Individuals – Managing short-term cash flow issues or funding unexpected expenses.
Purchasing Unmortgageable Properties – If a property doesn’t qualify for a traditional mortgage (e.g., missing a kitchen or bathroom), a bridging loan can help fund the purchase and renovations.
How Much Can You Borrow?
While many lenders won’t offer loans below £100,000, Sunrise Commercial can arrange small bridging loans from as little as £5,000. The exact amount you can borrow will depend on:
✔️ The value of the property or asset you’re using as security.
✔️ Your exit strategy (how you plan to repay the loan).
✔️ The lender’s criteria and minimum loan amount.
How Long Do Small Bridging Loans Last?
Bridging loans are designed to be short-term solutions. Typically, they last between 1 to 18 months, though some lenders may offer slightly longer terms. It’s important to have a clear repayment strategy in place.
How to Find a Lender Offering Small Bridging Loans
Since many lenders only offer large bridging loans, finding the right lender for a small bridging loan can be challenging. Here are some steps to help you secure the right deal:
Work with a Specialist Broker – Brokers (like Sunrise Commercial) have access to lenders who provide small bridging loans.
Look for Niche Lenders – Some smaller or specialist lenders focus on low-value bridging loans, but they are harder to find without expert guidance.
Check the Terms & Fees – Some lenders may offer small bridging loans but with higher fees or interest rates, so always compare options carefully.
Get Expert Advice – Contact a specialist finance broker to discuss your specific needs and find a tailored solution.
FAQs About Small Bridging Loans
Can I get a small bridging loan with bad credit?
Yes, but it depends on the lender. Some lenders are more flexible, especially if you have a strong exit strategy and valuable security.
How quickly can I get a small bridging loan?
Approvals can happen in as little as 24-48 hours, with funds available in a few days, depending on legal and valuation processes.
Are small bridging loans more expensive than larger ones?
Interest rates for small bridging loans may be slightly higher due to perceived risk, but the total cost is lower since you’re borrowing a smaller amount.
Can I use a small bridging loan to buy a property at auction?
Yes! Auction buyers often use small bridging loans to secure properties quickly before arranging long-term finance.
Do I need to make monthly repayments?
Most bridging loans allow interest to be rolled up and paid at the end of the term, reducing monthly outgoings.
Are Small Bridging Loans Right for You?
If you need fast, short-term funding but don’t require a large loan, a small bridging loan could be the ideal solution. While many lenders set high minimum loan amounts, Sunrise Commercial specialises in arranging bridging loans from as little as £5,000.
Whether you’re a property investor, developer, or an individual needing short-term finance, we can help you find the right bridging loan for your needs.
For more information contact us for a fees free chat.
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📞 Call us at 07939 091418
📧 Email: john@sunrisecommercial.co.uk
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