Quick answer
A closed bridging loan has a known exit date, usually because the sale, refinance or payment that repays it is already contracted or approved. An open bridging loan has no fixed exit date yet, such as when the property is listed but unsold. Closed bridges are generally simpler to assess because the exit is evidenced. Open bridges need more equity headroom, a longer term and a credible plan B.
Key points
- Closed: the exit is contracted and dated
- Open: the exit is planned but not yet contracted
- Open bridges need more headroom, a longer term and a plan B
- Many bridges start open and become closed once a contract is signed
- Closed bridge
- Exit contracted, date known
- Open bridge
- Exit planned, date unknown
- Biggest difference
- Certainty of the exit
- Property-secured range
- $20k – $5m
Every bridge has a far pier. The only question is whether it’s already built.
With a closed bridge, it is. The contract is exchanged, the approval is issued, the settlement date is booked. You know what repays the loan and roughly when. With an open bridge, the far pier is on the drawings but not yet in the ground: the property is listed but not sold, the refinance is planned but not approved. Both can work. They just carry different loads.
What’s the practical difference?
| Closed bridge | Open bridge | |
|---|---|---|
| Exit status | Contracted or formally approved | Planned, not yet contracted |
| Exit date | Known, with some risk of delay | Estimated range |
| Main evidence | The contract or approval | Appraisals, valuations, market evidence, campaign plan |
| Term | Exit date plus a buffer | Longer, to cover a full sale or approval process |
| Headroom needed | Less | More |
| Plan B | Useful | Essential |
The trade-off is certainty for flexibility. A closed bridge suits someone whose next step is locked in. An open bridge suits someone who needs to act before the exit is finalised.
When is a bridge closed?
A bridge is effectively closed when the event that repays it is contractually committed. Common examples:
- An exchanged sale contract with a settlement date, especially once any conditions such as the buyer’s finance are satisfied.
- A formal approval for a refinance, with documents issued.
- A business sale agreement that has gone unconditional.
Even then, “closed” doesn’t mean guaranteed. Settlements get delayed, approvals have conditions, and buyers occasionally fail to complete. A closed bridge still benefits from a term that runs past the expected date.
When is a bridge open?
Any time the exit hasn’t been contracted:
- A property that’s on the market but unsold.
- A refinance that’s been applied for but not approved.
- A business sale still at heads-of-agreement stage.
- A payment that’s expected but not yet assessed, such as an insurance claim still under review.
Open bridges are common and perfectly workable. They simply ask more of the rest of the structure. The lender relies more on the equity in the security, because that’s what protects everyone if the exit takes longer or delivers less.
Not sure which you have? The exit strength check will tell you how contracted your exit really is. Or describe your situation to a specialist and we’ll work it out together.
How should an open bridge be planned?
Treat the exit as a project with a timeline, and plan for the slow version:
- Get independent value evidence before you borrow, not after.
- Set a walk-away price you would genuinely accept, and check the numbers at that price in the bridging calculator.
- Pick a term that covers a full campaign, a failed first buyer and settlement. Our guide to bridging loan terms shows how.
- Write down plan B: a price cut, a different agent or method, a refinance of what’s left, or another asset.
- Report progress to your lender as the exit firms up. Lenders appreciate borrowers who keep them informed.
An illustrative example
Two businesses need the same amount against similar properties.
The first, a builder, has exchanged contracts on the sale of a storage yard, settling in eight weeks. It needs money now for a project deposit. It’s a closed bridge: evidence is the contract, the term covers settlement plus a buffer.
The second, a transport operator, needs money now and plans to sell a depot that is listed but has had no offers yet. It’s an open bridge: the lender asks for a valuation, the campaign plan and a longer term, and wants more equity headroom in case the depot sells for less. (Illustrative scenarios.)
Which should you choose?
In practice you don’t choose; your exit decides. What you can choose is how well prepared your exit is. Signing a sale contract before you borrow, rather than after, can turn an open bridge into a closed one. If time allows, that’s usually worth doing. If it doesn’t, an open bridge with good headroom and an honest plan B is a sound structure. See how lenders test a sale exit for more detail.
Does open or closed change the security needed?
Often, yes. With a closed bridge, the contract or approval gives the lender a reliable view of how and when it will be repaid, so the security mainly needs to cover the time until then. With an open bridge, the security has to carry more of the load, because it’s the lender’s protection if the exit takes much longer or delivers less.
In practice, that can mean an open bridge asks for:
- More equity headroom between peak debt and security value.
- Additional security, such as a second property.
- A longer term, which in turn means more costs to cover.
None of this makes an open bridge a bad choice. It means the structure should be sized for uncertainty from day one, instead of being stretched later.
Tell us how firm your far pier is
Whether your exit is signed and dated or still being worked on, we can tell you what structure fits. Enquiring takes about a minute and involves no credit check when you first enquire. Your details stay with one team rather than being spread across lenders, and a real person calls you to go through it.
When you fill in the form, describe the exit as it actually stands today. It’s the single most useful thing for getting the structure right first time.
Frequently asked questions
What is a closed bridging loan?
A bridging loan where the exit is already locked in, for example an exchanged sale contract with a settlement date, or a formal refinance approval. Because the lender can see when and how it will be repaid, the assessment focuses on confirming that evidence.
What is an open bridging loan?
A bridging loan where the exit is planned but not yet contracted, such as a property that's listed but unsold. The lender has to rely on value evidence, market conditions and your plan B, so it usually wants more headroom and a longer term.
Is an open bridging loan harder to get?
It needs more supporting evidence and usually more equity. It's very achievable with a realistic sale price, solid headroom and a sensible term.
Can an open bridge become a closed one?
Yes. Once you sign a sale contract or receive a formal approval, the exit becomes fixed. That doesn't normally change the loan itself, but it does make the end of the term much more predictable.
Which is cheaper?
Every loan is priced on its own circumstances, so there's no fixed answer. In general, lower risk tends to mean a simpler, cheaper structure, and a closed exit carries less uncertainty than an open one.