As with any finance agreement, the lenders have stipulated a payment timeframe and would expect this to be paid within the agreed term. Due to the nature of bridging finance, the main focus is set on how the loan is due to be repaid, if this proposed plan doesn’t seem viable then generally the finance will not go ahead.
The main exit methods which lenders find feasible are refinancing or the sale of the property. The refinancing route will generally prompt some due diligence prior to the lender agreeing to the loan, to ensure they are happy that this option is a possibility. The sale route will also generally come with some stipulations, with many lenders requiring the property to be on the market before or shortly after the start of the loan or following necessary building works with a set timescale.
Due to the nature of the property market, not everything goes according to plan, so a few months before the end of the finance agreement lenders usually make contact for an update on whether the exit route is working out as planned. Many lenders will work alongside borrowers whose exit route doesn’t look likely to occur within the agreed timeframe and often offer suggestions to help get it back on track. If this still doesn’t help with meeting the repayment terms, depending on the circumstances, many lenders will usually work with the borrowers as long as they have a plan and keep them updated regularly.
In the worst case scenario, the lender can repossess the property used for security which could massively impact your credit history as well as end up with a substantial financial loss.