The term ‘bridging loan’ has acquired negative connotations in recent years – and this must now evolve for the market’s continued success.

They are now widely regarded as complicated, expensive and associated with high fees offered by opportunistic high-net-worth individuals or wealthy private family offices.

As anyone working in our sector knows, this perception is wrong.

It’s an outdated way to view these loans that also hinders the growth and acceptance of what is actually a viable and exceptionally professional and ethical funding solution.

For all of these reasons, I’m calling for the market to replace the term ‘bridging’ with the phrase ‘short term lending’ to accurately reflect the current landscape and help this funding solution gain mainstream acceptance.

Bridging loans: myths vs. reality

The misconceptions surrounding bridging stem from a time when these loans were indeed extremely complex to source and costly to service.

However, the market has evolved significantly. Today, bridging loans are often no more difficult to place, administer and fund than a standard mainstream mortgage.

Indeed, funding is now widely available through reputable banks, specialist lenders and distributors.

According to trade association UK Finance, the UK bridging market has grown substantially, reflecting increased competition and a broader range of available products.

Market commentators vary in agreeing the size of the UK market – but the most reliable source ASTL quotes £4bn from its members. The market growth has led to more consumer-friendly options and a decrease in the overall cost of bridging loans.

The Bank of England’s current base rate of 5% is only marginally different to the starting rates for bridging loans.

This is a stark contrast to previous years when the Bank of England base rate was as low as 0.25%, and the annualised difference between standard and bridging rates was much more significant.

The benefits of short-term lending

By rebranding ‘bridging loans’ as ‘short term lending’” we can help change the perception of this funding solution.

Short term lending more accurately describes the nature of these loans and aligns them with other mainstream financial products.

Here are some key benefits of this rebranding:

Ethical and professional image: The phrase “short term lending” conveys a sense of professionalism and ethics, distancing itself from the negative image of high fees and opportunistic lending practices.

Accessibility and simplicity: Short term lending is perceived as more straightforward and accessible, encouraging more potential borrowers to consider it as a viable option.

Consumer-friendly market: Increased competition in the market has made short term lending more consumer-friendly than ever before. Borrowers now have access to better rates, more transparent terms and a wider range of lenders.

Mainstream acceptance: Rebranding as short term lending can help this solution become more mainstream, normalising it as a common financial tool rather than a niche or last-resort option.

Flexible funding

The term ‘bridging’ no longer reflects the reality of the modern, competitive and consumer-friendly short term lending market.

By adopting – and proactively promoting – the phrase ‘short term lending,’ we can help change outdated perceptions and encourage more borrowers to consider this flexible funding solution.

In my view, the shift towards using ‘short term lending’ will also help the market evolve by making these loans a normal, mainstream option for borrowers in need of temporary financial solutions.

It’s time to consign the legacy of complex bridging loans with high fees to history.

In its place, we must all embrace a future which has ethical, professional and accessible short- term lending at its heart.

Jason Berry is group sales director at Crystal Specialist Finance