How long should a bridging loan be? Sizing the term and the buffer

“How long can I borrow for?” is usually the second question people ask about a bridge, after “how much?”. It’s the right question asked the wrong way round. The term shouldn’t come from a menu of standard lengths. It should come from your exit.

How do you work out the right term?

Use three dates:

1. Start: when the money is needed (Event A).
2. Expected exit: when you reasonably expect the exit to happen (Event B).
3. Slow exit: when it could happen if the things most likely to go wrong do go wrong.

Then:

Term = from Start to Slow exit, plus a small margin for paperwork at the end.

That’s it. The rest of this page is about how to estimate the slow exit honestly for different exits.

The bridging timeline calculator does this visually: enter your two dates, pick a buffer, and it draws the span and suggests the term worth asking about.

What buffer suits each type of exit?

Exit	Common reasons for delay	Buffer thinking
Contracted sale, unconditional	Settlement delay, paperwork, clearance certificate	Modest; cover a delayed settlement
Contracted sale, conditional	Buyer’s finance or due diligence fails	Enough to re-sell if the buyer walks away
Listed, unsold property	Slow campaign, low offers, failed buyer	Generous; a second campaign plus settlement
Refinance	Valuation, financials, credit conditions	Enough for a second lender if the first declines
R&D refund	Registration, lodgement, ATO review	Allow for questions on the claim
BAS refund	ATO verification	Allow for verification requests
Insurance claim	Assessment, scope disputes	Allow for the full code decision period and payment
Grant milestone	Report review, eligibility questions	Allow for a report to be sent back

Some useful reference points from official sources:

• Clearance certificates: the ATO says applications can take up to 28 days to process, and recommends lodging at least 28 days before settlement. See the ATO’s clearance certificate page.
• BAS refunds: the ATO says it will tell you within 30 days of lodgement if it’s retaining a refund for verification.
• Insurance claims: Moneysmart summarises the industry code as a decision within four months of receiving the claim, except in some circumstances.
• R&D registration: must be made within 10 months of the end of the income year, per business.gov.au.

None of these tells you exactly how long your exit will take. They tell you where the known waiting periods are, which is where buffers belong.

Want help setting the right term for your exit? Share your dates with a specialist and we’ll talk it through.

Why not just take the shortest term?

Because the cost of running out of term is higher than the cost of unused term. If the exit slips past a short term, you’ll need an extension: usually a fresh assessment, fees, possibly a new valuation, and a negotiation that happens under time pressure.

A longer term, by contrast, costs nothing extra if you don’t use it, provided the loan allows early repayment without penalty. Check that before you sign. Our page on bridging loan costs explains what to ask.

How does an open or closed bridge change the term?

A closed bridge, with a contracted exit, needs a buffer for delay but not for the exit failing entirely. An open bridge, where the exit isn’t contracted yet, needs a buffer for the whole process: finding a buyer, negotiating, due diligence and settlement. That’s why open bridges nearly always run longer.

An illustrative example

A business is buying new premises settling on 1 February and selling its current premises, which is listed but not yet under contract.

• Start: 1 February.
• Expected exit: the agent expects an offer within six weeks and a 60-day settlement, so around mid-May.
• Slow exit: if the first buyer’s finance fails, a second campaign and settlement could push it to August.

The owner asks for a term to the end of August, confirms early repayment is allowed, and puts a note in the diary to review progress with the agent monthly. (Illustrative scenario.) If the sale stalls anyway, the page on what to do if the property doesn’t sell sets out the next steps.

What should you check in the loan terms about timing?

A few clauses matter more than the headline term:

• Early repayment. Can you repay the day the exit arrives without a penalty or minimum-term charge?
• Prepaid costs. If costs are prepaid for the full term and you exit early, is the unused portion returned or credited?
• Extension options. Is there a set process for extending, and what does it cost?
• Default triggers. What happens on the day after the term ends if the loan hasn’t been repaid?

These details decide whether a generous term is genuinely free insurance or quietly expensive. Ask for them to be explained before you sign.

Set the span to fit the gap

Getting the term right is one of the simplest ways to make a bridge safe. Tell us your dates and your exit, and we’ll help set a term that fits. It takes about 60 seconds, there’s no credit check when you first enquire, and we won’t pass your details around a network of lenders. A real person calls you to work through it.

Please give us your actual dates, including the ones you’re less sure about. It’s the only way to size the buffer properly.

Size your bridging term with us →