Refinancing a bridging loan is when a borrower takes out another loan to replace an existing finance facility. This can be with the same lender, or a different lender.
Refinancing using another bridging loan is often referred to as a re-bridge and borrowers may need to do this for several reasons. Generally, a re-bridge is needed when a client’s exit strategy has fallen through. They apply for a new bridging loan so they can pay off their current lender. This provides enough time to arrange a new exit strategy, should your initial strategy have fallen through. This could be to:
- Arrange traditional long-term finance
- Finish a refurbishment project
- Find a new buyer.