Your exit strategy is arguably the most important element of any bridging loan application. It is how you plan to repay the loan, and lenders will scrutinise it carefully before approving your facility.
Common Exit Strategies
Sale of the Property
The most straightforward exit — you sell the property and use the proceeds to repay the bridging loan. This works well for refurbishment projects where you plan to add value and sell at a profit.
Refinancing
You refinance the bridging loan onto a longer-term mortgage or other finance product. This is common when the property needs work before it meets traditional mortgage criteria.
Sale of Another Asset
You sell a different property or asset to repay the bridging loan. This requires evidence that the other asset is marketable and that a sale is realistic within the loan term.
Business Income or Cash Injection
Less common, but some borrowers plan to repay from business income, inheritance, or other anticipated cash flows.
What Makes a Strong Exit Strategy
- Realism: Can you genuinely achieve this within the loan term?
- Evidence: Can you demonstrate the viability with comparable sales, mortgage offers in principle, or other documentation?
- Contingency: What is your Plan B if the primary exit does not work out?
Common Mistakes
- Relying on a single exit with no backup plan
- Overestimating the sale price of the property
- Underestimating the time needed to refinance
- Not accounting for market changes
Our Approach
At StatusKWO, we work with borrowers to develop robust exit strategies that satisfy our credit requirements while remaining achievable. We would rather spend time getting the exit strategy right upfront than face challenges later in the process.
Get in touch to discuss your exit strategy with our experienced team.