The Power of Bridging Finance: Why brokers should add it to their tool kit

What is a bridging loan?

In essence, a bridging loan is short-term financing that helps ‘bridge’ the gap between purchasing a new home and selling the current property. Bridging finance leverages the equity in your existing property to secure an expedited settlement, making it an ideal solution for those who need to complete renovations, flip property, secure multiple assets, or buy before selling. Recently, Jason Lucas – Assetline’s Head of Sales – Commercial Lending, offered his expertise on a range of questions regarding bridging loans and delved into how brokers can leverage them to connect with more clients.

“Quite often, a bridging loan is sought when a broker has a client with equity in their current property who wants to purchase another before selling,” says Jason Lucas, “But it’s not a one-dimensional solution, it facilitates many situations where you have one or two securities and the intent and ability to pay the loan back within 12 months.”

Are bridging loans popular? 

Bridging loans are increasingly sought after by borrowers. This is largely due to a weakened ability to save for property purchases across the board amidst the cost of living crisis (ABS, 2024). Jason points out, “With the ability to offer conditional approval in under 24 hours, consumer bridging typically represents around 25% of our overall business.” Bridging finance fills an essential gap for borrowers and it’s a market that brokers should consider leaning into for their clientele.

The popularity of bridging loans also lies in their versatility, providing clients with a simple, effective solution for a variety of scenarios that mainstream banks often consider too complex. Some of the most common situations where clients require bridging loans include:

• Downsizing

• Upsizing

• Cosmetic renovations

• Renovate and flip

• Buying before selling

Why do some brokers hesitate to offer bridging loans?

There seems to be a common misconception that bridging loans aren’t suitable for returning clients, but that’s no longer the case. As Jason explains, “At Assetline, we provide an entire lifecycle with our products and solutions. From helping new clients secure fast finance to supporting long-term mortgages and SMSFs, Assetline offers comprehensive support throughout the process.”

“Bridging loans have been traditionally perceived as high-risk and therefore, not cost-effective for clients,” Jason notes. 

At Assetline, that’s simply not the case. With competitive pricing and interest rates on bridging finance starting from 7.99% (Comp. rate: 8.17% p.a.#) and flexible terms with no minimum, clients only pay for what they use - making it a cost-effective option, tailored to each individual circumstance.

Jason explains “bridging loans are among the most straightforward options, as they typically require less documentation compared to other loan types. They’re seamless, quick to secure and don’t demand the same level of income verification as some other products.”

As he puts it, “There’s no time to hesitate. A broker should constantly be adding value to their business - it keeps clients engaged. Clients come to you as a trusted source of knowledge, so make sure you're providing them with everything you have in your arsenal.”

How does an Assetline bridging loan differ from competitors?

“The security and peace of mind of working with a reputable funder with over 12 years of experience in the market”, is what Jason highlights first, he goes on, “central to that is our speed of approvals - quick turnaround times are at the core of everything we do.”

From bridging and construction to mortgages and private lending, Assetline offers a comprehensive, holistic approach for both brokers and their clients. 

“In three words: reputation, trust, speed”, Jason adds. “And, perhaps, Assetline’s most unique asset - certainly the cornerstone of our service - is access. The ability to pick up the phone and speak to your local BDM at any time. For brokers, it’s the vital support they need when their clients need them most.”

How can a broker assess whether a bridging loan is suitable for a client's needs? 

When discussing a client’s needs and priorities, it’s prudent to ask the right questions to determine whether a bridging loan is the right solution. Jason Lucas recommends the following key questions:

• Is there any urgency? How quickly do you need the funds, and how soon do you need to settle?

• What is your property’s estimated value?

• What is your current debt level?

• Can you service a mortgage?

• What is your exit strategy?

"By asking these questions, you immediately gain clarity on the client’s position and the available equity gap,” he says.

Bridging loans are a valuable tool to offer clients flexible, fast financing when they need it most. Assetline’s quick approvals, competitive pricing and comprehensive support are the ideal triumvirate for any broker looking to enhance their offering.

Are you ready to offer more to your clients? Contact your local BDM today or visit https://assetline.com.au/ to learn more about how our bridging products can work for you and your clients.

#Comparison rate is based on a secured loan of $150,000 over a term of 25 years. Approved applicants only. Terms and conditions and fees and charges apply. All applications are subject to lending and approval criteria. Target Market Determinations for our products are available on our website