Quick answer
A bridging loan exit strategy is your plan for repaying the loan in full at the end of the term, usually from a property sale, a refinance or a specific payment such as a refund or claim. Lenders assess it by asking what repays the loan, when that will happen and how certain it is, then look for written evidence and a credible plan B in case the first exit is late or smaller than expected.
Key points
- Three questions: what repays the loan, when, and how sure
- Written evidence turns a plan into an exit
- Size the bridge to a conservative exit amount
- A second exit makes a bridge far easier to approve
- Main exits
- Sale, refinance, money owed to you
- Tested on
- Amount, timing, certainty
- Protects you
- Buffer and a plan B
- Self-check
- Exit strength check tool
Most loans are judged by how they’ll be repaid over time. A bridging loan is judged by how it ends. That’s the exit: the single event that repays it at the end of the term.
It’s the first thing we ask about and the last thing a lender signs off on. Get it right and nearly everything else follows. Get it vague and even a well-secured bridge becomes hard work.
What three questions does every lender ask?
- What repays the loan? A named event, not a category. “The settlement of our sale of 14 Smith Street” beats “a property sale”.
- When? A date, or a realistic window, with the slow case in mind.
- How sure? What’s already signed, approved, lodged or registered, and what could still go wrong.
If you can answer all three in one short paragraph, with documents behind each answer, you have an exit strategy. If you can’t, you have an intention, which is a good start but needs work.
What exits do bridging lenders accept?
| Exit | Examples | Read more |
|---|---|---|
| Sale | Property, premises, business, other assets | Exit by sale |
| Refinance | Move to a bank or other long-term lender | Exit by refinance |
| Money owed to you | R&D refund, BAS refund, insurance claim, grant milestone, contract payment | Exit from money you’re owed |
| Combination | Part sale, part refinance; refund plus trading | Build each part separately |
Combinations are common and perfectly workable. Each part just needs its own evidence and its own timing.
How much should the exit be worth?
More than the bridge, with room to spare. Lenders look at the exit amount after deductions: selling costs, adjustments, excesses, and anything the ATO might offset. The ATO generally offsets refunds against tax debts, for example, so a refund exit shrinks if there’s an outstanding BAS debt.
A conservative approach is to calculate the bridge against the exit amount you’re confident of, not the one you hope for. The bridging calculator shows exit cover (net exit divided by new money) so you can see the margin at a glance.
Why does plan B matter so much?
Because the bridge is only as safe as its worst case. A lender asks: if this exit is three months late, or 15% smaller, what happens? A good plan B answers that before it’s asked:
- Another asset that could be sold or refinanced.
- Equity that would support an extension.
- A lower price you’d accept for a sale.
- A refinance of whatever balance remains.
If there’s genuinely no plan B, that’s worth knowing now. It usually means a longer term, a smaller bridge, or more security. Our page on what happens if the property doesn’t sell walks through the fallbacks.
If you want a second pair of eyes on your exit before you commit, a specialist can review it with you after a short enquiry.
What does exit evidence look like?
Paper beats promises. For each type of exit, there’s a set of documents that turns it into something a lender can rely on: contracts, approval letters, registration numbers, claim numbers, agreements. Our exit evidence checklist lists them by exit type. Gather them before you enquire and the whole process moves faster.
An illustrative example
Two owners describe their exits:
- Owner A: “We’ll sell the warehouse when the market picks up.”
- Owner B: “Our warehouse is listed with a local agent at $1.2m, appraised at $1.1m–$1.25m, EOI campaign closing 15 November. We’d accept $1.05m. If it doesn’t sell by March, we’ll refinance the balance against our other premises, which has $800k of equity.”
Same warehouse, same bridge amount. Owner B has an exit strategy. Owner A has a wish. (Illustrative scenario.) You can test yours with the exit strength check.
How should the term relate to the exit?
The term should end after the slow version of your exit, not the expected one. Build the buffer in from the start; extensions are always harder than planning. See bridging loan terms for a simple method.
What are the most common exit mistakes?
Most weak exits fail for one of a handful of reasons, and all of them can be fixed before you apply:
- The exit is too general. “Business will improve” or “we’ll refinance at some stage” isn’t specific enough to lend against.
- The amount is the headline, not the net. Sale prices before costs, refunds before offsets and claims before excesses all overstate the exit.
- The date is the best case. Terms sized to the hoped-for date leave no room for ordinary delays.
- Nothing is in writing. A phone call with an agent or an adviser isn’t evidence.
- No plan B. If the first exit fails, the lender needs to see what happens next.
Tick those off and your exit will read the way a lender wants it to.
Bring us your exit and we’ll help build the bridge to it
If you can tell us what repays the loan and when, we can usually tell you quickly whether a bridge fits and how it should be built. The enquiry takes about 60 seconds, there’s no credit check when you first enquire, and we keep your details to ourselves rather than circulating them to lenders. A real person reads your situation and calls you.
Please describe your exit on the form exactly as it stands today, including anything not yet signed. Honest detail gets you the right structure first time.
Frequently asked questions
What is an exit strategy for a bridging loan?
It's the specific event that will repay the loan at the end of the term, together with the evidence that it will happen. The common exits are the sale of a property or business, a refinance to a longer-term lender, and payments owed to you such as refunds, claims, grants or contract payments.
What makes an exit strategy strong?
A named event, a realistic date, an amount that covers the bridge, written evidence such as a contract or approval, and a plan B. The more of those you have, the stronger it is.
Is trading income an exit strategy?
Usually not on its own for a larger bridge. Trading income shows how costs are met while the loan runs, but lenders want a specific event to repay the balance. Smaller unsecured facilities are the exception, as they're often repaid from trading.
Do lenders need a plan B?
They strongly prefer one, especially for open bridges where the exit isn't contracted yet. A second property, a realistic refinance or an accepted lower sale price all count.
How do I test my exit before applying?
Use the exit strength check for a quick self-assessment, then put your numbers through the bridging calculator to see whether the exit clears the bridge.