Glossary
Bridging Finance Glossary
Bridging finance is full of jargon. Every term you're likely to encounter — from LTV to exit strategy — explained in plain English by a UK FCA-authorised broker.
Pricing
Loan to Gross Development Value (LTGDV)
LTGDV is the loan amount expressed as a percentage of the project's expected value once works are complete — used for development and heavy refurbishment finance.
Loan to Value (LTV)
Loan to value is the loan amount expressed as a percentage of the property's value. It's the single biggest factor in determining your bridging loan rate.
Loan structure
First Charge
A first charge means the lender has the primary legal claim against the property if it's sold or repossessed — they get repaid first.
Retained Interest
Retained interest means the full term's interest is calculated upfront and added to the loan on day one, repaid in full when the loan exits.
Rolled-up Interest
Rolled-up interest accrues monthly on the outstanding balance and is added to the loan each month, compounding as it goes. No payments are made during the term.
Second Charge
A second charge means another lender already has a first charge on the property; this loan ranks behind it in the queue if the property is sold or repossessed.
Serviced Interest
Serviced interest is paid monthly from your own income — the lender doesn't add interest to the loan balance. The cheapest interest structure if you can afford the monthly payments.
Process
Automated Valuation Model (AVM)
An algorithmic property valuation that uses recent sold-comparable data to estimate value — used in place of a physical surveyor visit on standard cases.
County Court Judgment (CCJ)
A County Court Judgment is a court-ordered ruling against someone who hasn't paid a debt. CCJs appear on credit files for six years and affect lender risk assessment.
Decision in Principle (DIP)
A Decision in Principle is the lender's preliminary indication that they would lend to you, subject to full underwriting. It's not binding but signals the deal is viable.
Exit Strategy
An exit strategy is how you plan to repay a bridging loan at the end of its term. Every bridging lender requires a credible, time-bound exit before they'll lend.
Valuation
A RICS surveyor's professional opinion of property value, instructed by the lender as part of the bridging underwriting process.
Use case
Auction Finance
Bridging finance specifically structured to complete inside the 28-day deadline imposed by most UK property auctions.
Chain Break
A chain break happens when a property sale falls through, leaving the seller unable to fund the onward purchase. Bridging finance is the standard fix.
Developer Exit
A bridging facility used to refinance a near-completed development off the development-finance lender, typically when units are wind-and-watertight but not yet sold.
Development Finance
Specialist construction finance covering land acquisition, build costs, and contingency for ground-up development or major conversion projects.
Heavy Refurbishment
Structural property works requiring building regulations or planning approval — including extensions, conversions, and change of use. Funded under specialist refurbishment-bridging products.
Light Refurbishment
Cosmetic property works that don't require planning permission or building regulations approval — funded under standard bridging rates.