Bridging Finance Explained: Expert Insights with MS Lending

Podcast Summary: Deji Nehan & Jamie Pritchard

This episode is a practical deep dive into bridging finance and auction property investment, featuring Jamie, Sales Director at MS Lending Group, in conversation with Deji.

The discussion explains how bridging finance can help investors move quickly on property opportunities—particularly auction purchases where buyers may have only 28 days to complete and risk losing their deposit if they fail to complete on time.

A major focus is the importance of choosing the right bridging lender. Jamie explains that not all bridging finance is structured in the same way and that auction investors need lenders with speed, consistency and flexibility. MS Lending Group's approach includes automated valuations (AVMs), early legal processes and the use of title insurance to help reduce delays.

The episode also breaks down "day-one funds", retained interest and the difference between the gross loan and the actual net amount available to the investor. Using an example of an £100,000 property, Jamie explains why investors should not assume that an 85% gross loan means they only need a 15% deposit. Other costs such as fees, stamp duty and refurbishment costs must also be considered.

For investors who don't have all the required capital, the conversation explores alternatives such as leveraging another property, using existing assets as security or entering into a joint venture with another investor.

Perhaps the most important lesson is the exit strategy. Investors are advised not to enter a bridging loan without a clear Plan A and Plan B for repaying the finance. Preparation before bidding is equally important: investors should obtain terms beforehand, establish their maximum bid, prepare their documentation and understand the deal before committing at auction.

Finally, Jamie explains that investors who exit a bridge earlier than expected may not have to pay interest for the unused period, while also warning investors not to underestimate how long a project may take.     

Podcast Timestamps
1. 1:52 – 2:44 | Why auctions create financing opportunities

Jamie explains why auction properties can be attractive to investors, particularly properties that are undervalued, distressed or require refurbishment.

Key takeaway: Auction opportunities can allow investors to acquire properties, add value and either sell for profit or retain them for rental income.

2. 2:26 – 2:44 | The 28-day auction deadline

A crucial reminder for auction buyers: once the hammer falls, the completion clock starts.

Key takeaway: Investors need finance arranged quickly because failure to complete can put their 10% deposit at risk.

3. 4:21 – 5:03 | Not all bridging finance is the same

One of the strongest lessons for investors is that they shouldn't assume every bridging lender operates the same way.

Key takeaway: For auction purchases, investors should look for a lender with speed, consistency, reliability and flexibility.

4. 6:31 – 8:44 | How lenders can speed up auction finance

Jamie explains how AVMs, specialist teams, early legal processes and title insurance can help accelerate a transaction.

Key takeaway: The financing process itself can make the difference between completing an auction purchase successfully and missing the deadline.

5. 10:01 – 12:10 | Understanding "Day-One Funds"

This is one of the most educational sections for anyone new to bridging.

Key takeaway: An 85% gross loan does not necessarily mean an investor only needs the remaining 15% in cash. The investor must account for interest, fees, stamp duty and other costs.

6. 12:11 – 13:41 | Retained interest and the true cost of bridging

Jamie explains how retained interest works and why investors need to understand the difference between the gross facility and the net funds they actually receive.

Key takeaway: Always get a transparent breakdown of the total facility, deductions and the amount actually available to complete the project.

7. 15:50 – 17:17 | How investors can leverage finance

The conversation challenges the idea that investors must have all the cash themselves before using finance.

Key takeaway: Investors may potentially use existing assets, additional security or joint ventures to help structure a deal.

8. 17:17 – 18:37 | The Golden Rule: Always have an exit strategy

This is arguably the most important timestamp in the episode.

Key takeaway: Never take bridging finance without a clear Plan A and Plan B for exiting the loan. The exit could involve selling, refinancing or moving onto longer-term finance.

9. 18:17 – 19:20 | Prepare BEFORE you bid

Jamie explains why investors should obtain finance terms before entering an auction and determine their maximum bid.

Key takeaway: Don't get emotionally carried away at auction. Know your financing limits and maximum purchase price before pressing the bid button.

10. 20:45 – 22:15 | What happens if you finish the project early?

Jamie explains how interest can work when a bridge is redeemed earlier than expected, while also warning investors against taking a term that is too short.

Key takeaway: Don't assume your project will finish exactly according to plan. Allow sufficient time because going over the agreed term can become expensive and affect future projects.

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