Key Takeaways
- •Bridging finance is a short-term loan secured against property, used to bridge a gap between buying and selling
- •Typical terms: 6-24 months, up to 75% LVR, from 1.65% establishment fee
- •Best for: time-sensitive acquisitions, buy-before-you-sell, working capital
- •No income verification required with private lenders like Alphacon Capital
Bridging finance is a short-term loan designed to bridge the gap between two financial events. In most cases, it covers the period between purchasing a new property and selling an existing one — but it applies to a much broader range of scenarios than most people realise.
In Australia, bridging finance is used by businesses, property investors, and developers who need capital quickly and cannot wait for traditional bank timelines. The loan is secured against property (residential, commercial, or land) and is repaid once the borrower completes their exit — typically a property sale, refinance to a bank, or settlement of another transaction.
How Does Bridging Finance Work?
The mechanics are straightforward. A borrower identifies a need for short-term capital — usually because they need to act before their long-term funding is in place. They apply for a bridging loan, which is assessed primarily on the value of the property being offered as security and the viability of the exit strategy.
Once approved, the loan settles and the borrower receives the funds. The loan runs for the agreed term (typically 6 to 24 months) and is repaid when the exit event occurs. Interest can be prepaid upfront, paid monthly, or in some cases capitalised into the loan so that no cash repayments are required during the term.
The key difference between bridging finance and a standard mortgage is the timeframe and the assessment criteria. Banks assess borrowers on income, credit history, and serviceability. Private bridging lenders assess primarily on property value and exit strategy. This fundamental difference is what makes bridging finance accessible to borrowers who cannot meet bank criteria.
Common Use Cases for Bridging Finance
The most well-known use case is buying a new property before selling the existing one. But bridging finance is used for far more than that.
Property purchase settlement
You have exchanged contracts on a purchase but your bank cannot settle in time. A bridging loan covers the settlement, and you refinance to the bank once their approval comes through.
Working capital
You need cash flow for your business — payroll, stock, expansion — and you have equity in property. A bridging loan unlocks that equity quickly without the weeks of documentation a bank requires.
Debt consolidation
Multiple debts across different lenders. A bridging loan consolidates them into a single facility, giving you time to restructure into a long-term solution.
Auction purchases
Auctions require unconditional offers. A bridging loan provides the certainty to bid, knowing the funds are available for settlement.
What Does Bridging Finance Cost?
Costs vary by lender and product, but the typical components are:
Establishment fee: Usually 1.5% to 3% of the loan amount. At Alphacon Capital, our establishment fee starts from 1.65%. Loan management fee (LMF): A monthly fee that functions as the interest rate. This ranges from $250 per month (flat) on our Resolve product to 0.20% per month on Reach. Risk fee: Some lenders charge a risk fee based on security type and loan-to-value ratio (LVR). Our Resolve product carries no risk fee at all — a significant saving.
There are also third-party costs including valuation fees, legal fees, and ASIC search fees. These apply regardless of which lender you choose.
Bank vs Private Lender: Which Should You Choose?
Banks offer lower interest rates but longer approval times, extensive documentation requirements, and rigid criteria. A typical bank bridging loan takes 4 to 8 weeks and requires full financials, tax returns, and a serviceability assessment.
Private lenders like Alphacon Capital offer same-day approvals, minimal documentation, and flexible criteria. The cost is higher, but the speed and certainty often make the difference between securing a deal and losing it. Many borrowers use private bridging as a short-term solution and refinance to a bank once the time pressure has passed.
The right choice depends on your timeline. If you have 6 to 8 weeks, a bank may be cheaper. If you need capital in days, a private lender is the practical option.
How to Apply for Bridging Finance
At Alphacon Capital, the process starts with a scenario submission. You can use our AI Loan Assessment tool to get an instant indication of eligibility, or contact us directly with the details of your deal. We provide same-day indicative terms and can settle in as fast as two weeks from application.
Our loans are distributed through accredited mortgage brokers. If you do not have a broker, we can connect you with one in your area. All lending is to companies and trusts for commercial purposes only — we do not provide personal or consumer credit.
Which Alphacon Capital Product Suits Bridging?
For standard bridging with income documents and a credit score above 600, our Resolve product offers the lowest cost with no risk fee. For faster approval with no income verification, Boost provides 24-hour turnarounds in metro areas. Use our cost estimator to compare the options for your specific scenario.