How a revolving facility works
A standard bridge is a single advance against a single property, repaid in full at the end. A revolving facility works more like an overdraft secured on property. The lender agrees a maximum limit and a term, commonly 12 to 36 months, and you draw funds against it as deals arise. When a property sells or is refinanced, the drawing is repaid and the headroom becomes available again.
Each property bought with the facility is usually added as security, and each drawing is sized against that property's value, typically up to 70% to 75% of value on a first charge. Some lenders also accept a second charge or additional security over property you already own, which can increase the headroom available.
Interest is normally charged only on the balance drawn, not the full limit. That can make a revolving facility cheaper than holding a large standard bridge for months while funds sit unused.
Costs to look at beyond the rate
Revolving facilities carry costs that do not appear on a standard bridge, and the headline rate alone does not show the full picture. When we compare lenders, we look at:
- The arrangement fee, and whether it is charged on the full limit or on each drawing
- Any commitment or non-utilisation fee on headroom you are not using
- A minimum initial drawdown, which some lenders set as a share of the limit
- Valuation and legal costs each time a new property is added as security
- Renewal fees if you want to extend the facility at the end of the term
For an investor completing several deals a year, saving repeated arrangement fees and legal set-up can outweigh these costs. For someone with one or two deals in mind, a standard bridge for each may be simpler and cheaper. We model both so you can compare the likely total cost.
Who it suits and what lenders look for
Revolving facilities suit borrowers who buy property as a business: refurbish-and-sell investors, auction buyers, landlords building a portfolio and developers who need funds ready for small sites. Lenders are agreeing to fund future deals they have not yet seen, so they focus on the borrower as much as any single property.
Expect the lender to ask for a schedule of property you own or have bought and sold, the kind of deals you plan to do, and how long you typically hold each property before selling or refinancing. A consistent record of completed exits supports a larger limit. Many lenders set rules for each new drawing, such as property types, locations, minimum values and the maximum works allowed, and may ask to sign off each purchase before funds are released.
Personal guarantees are common where the borrower is a limited company. Lenders will also want to understand your other borrowing, so the facility fits alongside any existing mortgages or bridges.
Managing exits across several properties
With a revolving facility, you are managing several exits at once. Each property needs a credible sale or refinance within the facility term, and the lender will keep track of how long each drawing has been outstanding. Properties that sit unsold can use up headroom and slow your next purchase.
It is worth planning a buffer. Keeping part of the limit undrawn gives room for a slower sale or an unexpected cost on one property without stopping the rest of the plan. Check, too, what happens at the end of the term: whether outstanding drawings must be repaid in full, or whether the facility can be renewed and on what terms.
We compare revolving structures on the limit, the drawdown conditions, the fees and the renewal terms, then approach suitable lenders with a clear summary of your track record and pipeline. Instant Quotes gives indicative figures as a starting point, and final terms depend on each lender's valuation and checks.
If you or your family will live in a property
Revolving facilities are designed for investment and business-purpose borrowing. If any property secured under the facility is, or will be, lived in by you or a close family member, and the borrower is an individual or the trustees of a trust, that borrowing is a regulated mortgage contract with additional protections, and a different product is normally needed. We will tell you at the outset if that applies and how your case will be handled.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
