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CW Asset Finance | Vehicle & Equipment Finance Yorkshire

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What is an exit strategy for a commercial bridging loan?

An exit strategy is your plan for repaying the bridge in full by the end of the term. It is the single most important part of the application. Lenders want a specific, evidenced route — usually a sale of the property or another asset, or a refinance onto a commercial mortgage or term facility.

Evidence matters more than intention. A sale supported by a marketing appraisal, an offer or a memorandum of sale carries far more weight than a statement that you plan to sell. A refinance exit is stronger with a decision in principle from the incoming lender.

Build in contingency. If your exit depends on works completing, planning being granted or a tenant signing, ask what happens if that slips and whether you could service or repay the facility anyway.

Have a fallback. Lenders often ask what your second exit is, and having a credible one — a price reduction you could accept, or another asset you could sell — strengthens the case.

If the exit fails, the consequences are real: extension and default costs, and the lender enforcing its security over the property. Do not proceed on an exit you would not bet your own property on, because that is effectively what you are doing.

Thinking about it for your own business?

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CW Asset Finance is a credit broker, not a lender. Finance is subject to status and lender approval.