Unregulated bridging loans
A bridging loan is usually unregulated when it is for business or investment and neither you nor a close family member live in, or intend to live in, the security. Typical cases are buy-to-let purchases, commercial property, land and limited-company borrowing. Lenders focus on the asset and the exit more than on consumer affordability, but personal guarantees and real risk remain.
Last reviewed: 4 October 2026
BridgingLoans.online is an independent UK introducer operated by PASECOM GROUP LTD (company 17139327, ICO ZC117546). We do not lend and we do not advise. Nothing on this page is a quote, an MCOB illustration or an offer of credit.
What makes a bridging loan unregulated?
The dividing line is occupancy. If the property is, or will be, a home for you or a close family member (the usual test is at least 40% of it), the loan is likely to be regulated. If it is held purely for investment or business — let to tenants, used commercially, held as land or bought through a company that will not house the directors’ families — the loan is usually unregulated. The test is about real use. If your plans change and someone will move in, tell the broker immediately so the case can be classified correctly. See regulated bridging loans for the other side of the line.
Why do investors use unregulated bridging?
Speed relative to a commercial or buy-to-let mortgage; underwriting that can look at the property rather than a salary; comfort with limited companies and more complex titles; and the ability to buy property that is not yet mortgageable. Because there is no consumer process of the kind used on a home loan, investment cases can move faster once valuation and legal work are done — those still take the time they take.
Unregulated does not mean unchecked. Lenders still carry out anti-money-laundering checks, verify identity and source of deposit, look at credit history and ask for evidence of the exit. What changes is the emphasis: the property and the plan carry more weight than a salary and a consumer affordability model.
What is it typically used for?
| Use | Typical exit | Read more |
|---|---|---|
| Buy-to-let purchase or auction lot | Refinance onto a buy-to-let mortgage, or sale | Auction finance |
| Refurbishment before letting or sale | Refinance once lettable, or sale | Heavy refurbishment |
| Commercial or mixed-use property | Commercial mortgage once let, or sale | Commercial bridging |
| Land with or without planning | Development finance or sale | Land bridging |
| Finished development units | Unit sales or term refinance | Development exit |
| Business capital against property | Sale, refinance or documented receipt | Capital raising |
How is interest usually handled?
Retained or rolled-up interest protects cash flow while a property is empty or being worked on. Serviced interest can keep the gross loan lower if you have income the lender accepts, such as rent from a let property. For dated market rate bands, see bridging loan costs and fees — guidance only, not our rates. The mechanics are in retained vs serviced vs rolled-up interest.
Worked example: an investment purchase
Suppose a landlord needs £260,000 of cash to buy a £400,000 investment property for 12 months, using this site’s teaching defaults.
| Line | Amount |
|---|---|
| Value of the investment property | £400,000 |
| Net funds needed | £260,000 |
| Arrangement fee (2% of net, added to the loan) | £5,200 |
| Interest base (net + fee) | £265,200 |
| Monthly interest at 0.85% | £2,254.20 |
| Total interest (12 months, simple retained) | £27,050.40 |
| Gross facility | £292,250.40 |
| Net LTV | 65.0% |
| Gross LTV | 73.1% |
| Total cost of credit (fee + interest) | £32,250.40 |
Indicative educational example using this site’s calculator method: fee = net × 2%; interest = (net + fee) × 0.85% × months; gross = net + fee + interest. The 0.85% a month and 2% fee are teaching defaults, not our rates and not a quote. Valuation, legal and broker costs are not included.
The gross LTV of 73.1% is close to the 75% gross cap many residential investment lenders work to; a lower valuation could push it over. If the exit is a buy-to-let refinance, the new mortgage has to repay £292,250.40 plus costs, and the rent has to pass the new lender’s stress test. Run variations in the calculator.
What do lenders look at on an unregulated case?
The property comes first: its value, condition, location and how easily it would sell. Then the loan size against that value, usually measured on the gross loan. Then the exit, tested against the timescale and any future lender’s criteria. Then the borrower: experience, credit history, the company structure and who will guarantee it. Experience matters most on heavier projects — a first refurbishment is a different risk from a landlord’s twentieth purchase — but it is not always a requirement on simpler cases.
Which mistakes are common?
- Assuming the loan is unregulated because it is in a company name, when a family member will actually live in the property.
- Planning a buy-to-let refinance without checking whether the rent passes a typical stress test.
- Choosing the shortest possible term to save interest, then paying extension fees when works overrun.
- Signing a personal guarantee without independent legal advice.
What protections are different?
Unregulated borrowers do not get the consumer mortgage protections that apply to a regulated home loan. That makes it more important to read the documents carefully, take independent legal advice — especially on any personal guarantee — and understand default and extension terms before you sign. Ask the broker to explain, in writing, what happens if the loan is not repaid on the redemption date. Company borrowers should read limited company bridging loans.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
Indicative estimate only. Not a quote, illustration under MCOB, or offer of credit. BridgingLoans.online is a trading name of PASECOM GROUP LTD (company 17139327, ICO ZC117546), an introducer, not a lender. Email hello@bridgingloans.online.
Last reviewed: 4 October 2026.
FAQs
Can I get an unregulated loan with bad credit?
Often the file is judged on the asset and the exit. Severe recent insolvency can still block a case. A refinance exit may be harder if mainstream mortgage lenders will not accept the credit profile.
Do limited-company borrowers give a personal guarantee?
Most unregulated lenders ask directors of an SPV or trading company for a personal guarantee, and they usually require independent legal advice on that guarantee.
What LTV is typical on unregulated bridging?
Residential investment stock is often discussed up to around 75% gross LTV. Commercial property and land are commonly lower, sometimes around 60% to 65% or less, depending on planning and liquidity.
Can an unregulated loan later become a home I live in?
You should not take an unregulated investment loan if you or family intend to occupy the security. If your plans change, tell the broker immediately so the file can be classified correctly.
Is an unregulated bridging loan riskier for the borrower?
It carries fewer consumer protections than a regulated home loan, and directors often give personal guarantees. Read default and extension terms carefully and take independent legal advice before signing.
Do you advise on unregulated bridging?
No. We are an introducer. We qualify purpose, occupancy and exit and pass the case to an FCA-regulated broker. We do not recommend a product.
Next step
Use the calculator for an indicative starting point, then enquire if you want an introduction.