Start with the lender’s valuation
The relevant value may differ from the purchase price, estate-agent estimate or development appraisal. Structure against the value the lender can rely on.
Structure the loan
Bridging finance LTV: how the numbers fit together.
LTV is a relationship, not a headline limit.Usable leverage depends on value, fees, retained interest and valuation headroom.
Operator notes
The three numbers to separate before requesting terms.
A clean LTV discussion distinguishes value, gross debt and cash released. Blurring them produces false comparisons.
Separate gross loan from net cash
The gross facility can include retained interest and agreed costs. Net proceeds are what the borrower actually receives after deductions and redemptions.
Leave headroom for movement
A deal that only works at the most optimistic value has no resilience. Allow room for valuation changes, interest accrual and completion costs.
Next step
Test the structure before the deadline tests you.
Compare the gross facility, deductions, net cash and estimated redemption under the same assumptions.
Practical context
A lower headline LTV can still release less cash than expected.
Two facilities quoting the same percentage can produce different net proceeds because fees, retained interest, existing secured debt and legal costs are treated differently. Compare the cash available at completion and the repayment amount at exit, not the percentage in isolation.
The valuation date, property condition, tenure, location, planning position and intended use can all affect the value used. A sensible structure also leaves enough time and equity for the exit to work if the transaction takes longer than planned.
- Ask for gross loan, deductions, net proceeds and estimated redemption separately.
- Stress-test the numbers at a lower valuation and a later exit date.
- Treat a reference LTV as illustrative until valuation and underwriting are complete.
Decision framework
Use the comparison to make a funding decision.
Gross LTV does not tell the borrower how much cash will be available at completion.
Gross LTV
Gross loan divided by the relevant property value.
Net LTV
Usable proceeds after retained interest, fees and costs, divided by value.
Valuation basis
Current value, purchase price or another agreed basis may constrain the calculation.
Examples are educational; eligibility, pricing, security and terms depend on formal assessment.