Bridge finance has evolved significantly since its origins as a niche short-term lending product. Today, it sits at the centre of real estate capital markets strategy for institutions, family offices and developers alike. Understanding when, why and how to use it is increasingly a competitive advantage.

The Current Landscape

Across our core markets — the UK, France, Switzerland and Monaco — we are seeing a structural shift in how prime acquisitions are financed. With institutional lenders tightening credit criteria and extended due diligence timelines creating execution risk, bridge lending has stepped into the gap.

In London, prime residential transactions above £10 million increasingly involve a bridge component, even when the buyer could technically proceed on cash. The rationale is straightforward: preserving liquidity while securing the asset at speed.

In Paris, the market has followed a similar trajectory. The combination of notarial process timelines and increasing vendor preference for certainty of execution has made bridge finance almost standard practice for cross-border buyers in the 8th, 16th and adjacent arrondissements.

Structuring Considerations

The most common mistake borrowers make is treating bridge finance as a commodity. It is not. The difference between a well-structured bridge facility and a poorly structured one can be the difference between a smooth exit and a distressed refinancing.

Key structural elements to evaluate:

Loan-to-Value. Prime assets in recognised locations will typically support up to 70-75% LTV on a senior basis. The type of asset, its liquidity profile and the exit strategy all influence what is achievable.

Term and Extension Options. Most bridge facilities run between 6 and 18 months. Building in a contractual extension option — even at a higher margin — provides critical optionality when exit timing shifts.

Exit Strategy. Lenders underwrite the exit, not just the entry. A clearly articulated and credible exit — whether sale, refinancing onto a term loan, or development finance — is essential to securing the best terms.

Prepayment Flexibility. If there is any possibility of an early exit, ensure your facility is structured with minimal break costs. Some lenders impose punitive early repayment charges that can materially erode returns.

Our Approach

At Passy Partners, we approach bridge mandates as a structuring exercise first, and a financing exercise second. Our role is to understand the full context of a transaction — the asset, the exit, the timeline, the borrower's broader capital position — before approaching the lending market.

This means we often advise clients to adjust their brief before going to market. A facility that is optimally structured before it is presented will consistently outperform one that is shopped without preparation.

If you are evaluating a bridge requirement, we would welcome the opportunity to discuss your situation before you approach lenders directly.