Underwriting

What lenders look for, and what an exit strategy means

Short term property lending is assessed differently to a mortgage. Income matters less, the asset and the repayment plan matter more, and the quality of the paperwork often decides how smoothly a case runs.

Category: How it works

Product: Bridging Finance

First question: How does the loan get repaid
Second: Is the security worth what you say
Third: Can the borrower deliver the plan
Fourth: Is the legal title clean

The exit strategy, in plain terms

An exit strategy is the specific, evidenced event that repays the loan. Sale of the security property, sale of another asset, or refinance onto longer term debt are the usual routes. Lenders want evidence rather than intent: marketing details and offers for a sale, or criteria checked and figures modelled for a refinance. A plan that amounts to something will turn up is not an exit.

Name the event and the expected timing
Evidence the value with agent appraisals or comparables
Show the refinance lender's criteria can be met
Have a credible second option if the first slips

The security property

Valuers look at condition, marketability, tenure, title and location. Short leases, structural issues, restrictive covenants, unusual construction, and mixed use elements all shape the outcome. A valuation coming in below expectation is the most common reason a case has to be restructured, so being realistic at the outset saves time and fees.

The borrower and the track record

For project cases, experience counts. A borrower who has completed similar schemes, with a contractor and professional team to match, is a different proposition to a first time developer with an ambitious scope. Credit history and any adverse events are considered, though specialist lenders take a broader view than high street lenders.

Presentation and legals

Cases move faster when the pack is complete: identification, proof of deposit, valuation access, the schedule of works where relevant, and a solicitor who is used to short term lending. Incomplete packs and slow legal responses are the main causes of delay, not underwriting itself.

Full identification and address verification ready
Evidence of the deposit and its source
Costed schedule of works for project cases
A solicitor experienced in short term secured lending

Frequently asked

What is an exit strategy?

It is the specific event that repays the loan, usually a sale or a refinance, supported by evidence that the event is realistic within the loan term.

Does my personal income matter?

It carries less weight than on a mortgage, because the focus is the asset and the exit, though lenders still consider affordability where interest is serviced monthly.

Will adverse credit stop an application?

Not automatically. Specialist lenders take a case by case view, and the explanation and current position matter. It may affect which lenders will consider the case.

How can I speed up the process?

Have the paperwork ready, instruct a solicitor familiar with short term lending, and give the valuer prompt access. Timescales still depend on the lender and the property.

What if I have two possible exits?

That usually strengthens the case, provided both are evidenced. Lenders like a primary plan with a realistic fallback.

Want your case reviewed before it goes to a lender

Call 0345 2690628 and we will tell you what is missing and how underwriters will read it.

Call 0345 2690628 Send your deal details