Bridge Finance in Prime European Markets: What Borrowers Need to Know

A bridge loan is a short-term facility secured on real estate, drawn in a single advance and repaid from a defined exit. Borrowers in prime European markets use it when speed or certainty of execution matters more than the lowest cost of funds: to acquire before a sale elsewhere completes, to refinance a facility approaching maturity, to fund a refurbishment, or to release equity from a low-leverage asset. This is a practical overview of how it is structured and of what changes between the five markets we work in.

What a Bridge Facility Looks Like

Bridge facilities on prime assets are typically priced between 8% and 12% per annum, with senior leverage up to around 70% of value, for terms of 3 to 24 months. Where a transaction sits in those ranges depends on the asset, its location and liquidity, the term, the borrower's profile and, above all, the strength of the exit.

Four structural points deserve more attention than the headline rate:

–Loan-to-value. Prime assets in recognised locations support the upper end of senior leverage. Less liquid assets, unusual holding structures or a thin exit case pull it down.

–Term and extension. Building in a contractual extension option, even at a higher margin, protects the borrower when the exit takes longer than planned.

–Exit. Lenders underwrite the exit, not just the entry. A sale, a refinance onto term debt or a move to development finance must be credible on day one.

–Prepayment. If an early exit is possible, minimum interest periods and break costs should be negotiated before signing, not discovered at redemption.

What Changes From One Market to the Next

The product is the same across Europe; the constraints that decide who will lend are local.

–United Kingdom. The most liquid bridge market in Europe. Prime central London is widely held through UK, Jersey or BVI SPVs, and Stamp Duty Land Tax sits alongside the deposit in the day-one cash requirement.

–France. Non-resident buyers commonly hold through an SCI or SCI à l'IS, which shapes lender eligibility and IFI exposure and is settled with the notaire from term-sheet stage. A French prêt relais is a different, regulated consumer product.

–Monaco. A narrow pool of private banks and specialist lenders. Underwriting is on global wealth and liquidity rather than local income, and an assets-under-management relationship with the financing bank is often part of the structure.

–Switzerland. Lex Koller restricts residential acquisition by persons abroad, so eligibility is confirmed with Swiss counsel before any term sheet. Swiss-resident borrowers and Swiss vehicles are financed conventionally.

–Luxembourg. Prime real estate is frequently held through a SOPARFI, and the security package follows the holding chain.

Timing

From a complete information pack, a straightforward bridge can typically complete in four to eight weeks. The critical path is usually legal due diligence and security rather than credit, which is why the holding structure and local counsel are mobilised at the start rather than after terms are agreed.

Our Approach

We treat a bridge mandate as a structuring exercise first and a financing exercise second. Before any lender sees the file, we look at the asset, the exit, the timeline and the borrower's wider position, and we often suggest adjusting the brief. Each mandate then goes to a shortlist of three to five lenders selected for genuine fit with the asset and the jurisdiction. Fees are agreed in writing up front and paid by the borrower on completion.

If you are weighing a bridge requirement in one of these markets, we would welcome the conversation before you approach lenders directly.