Auction finance vs bridging finance
The terms are often used interchangeably, but there is a subtle distinction.
Auction finance is generally bridging finance structured specifically around an auction purchase and its completion deadline. Bridging finance itself is much broader.
Auction finance is driven by the deadline. You have committed to buy a property and need short-term funding to complete within the auction's contractual timescale.
A bridge can be used in many other situations: buying before selling another property, refurbishing an unmortgageable property, buying land, funding a planning opportunity, refinancing an existing short-term facility or completing a time-sensitive acquisition.
The question isn't whether auction finance is better than bridging finance. It is: what are you trying to achieve, and what is the most appropriate short-term structure?
For an auction purchase with a tight completion deadline, a lender experienced in auction transactions can be particularly important. For a complex refurbishment or purchase requiring more time, a broader bridging solution may be more appropriate.
Whichever route you take, the exit strategy matters.
At Eastgate, we look at the purchase and the eventual exit together.
