A GCB bridging loan is a short-term financing facility specifically used for Good Class Bungalows – Singapore’s largest and most exclusive class of landed housing. It functions like other bridging loans by providing interim capital to bridge timing gaps, but the scale is larger given GCB values. Buyers of GCBs often use bridging finance to quickly secure the property (which could cost tens of millions) while arranging for longer-term funding or liquidity from selling other assets. The GCB itself is usually pledged as collateral, and possibly other properties or assets if needed, to raise sufficient capital. Because GCBs are extremely high-value, bridging loans in this realm are bespoke and may involve more structured terms (such as interest-only periods, or second-charge arrangements) to accommodate the borrower’s situation.

Eligibility for GCB bridging loans is naturally tied to the ability to purchase or own a GCB. In Singapore, Good Class Bungalows are generally restricted to citizens; any foreign person or even PR who wishes to buy one must obtain special government approval (which is rare). Thus, most borrowers for GCB bridge loans are Singapore citizens, often high-net-worth individuals or families. Additionally, bridging lenders will require the borrower to qualify as an Accredited Investor due to regulatory guidelines and the large loan amounts . In practice, this means the borrower should have net assets exceeding S$2 million or other criteria that define an Accredited Investor. If the GCB is being purchased under a trust or company structure, that entity must meet the lender’s conditions as well. Essentially, if you have the means to own a GCB and a viable plan to refinance or repay, you would likely qualify for a GCB bridging loan.

GCB bridging loans can be very substantial. Lenders typically offer up to around 70% of the GCB’s appraised value, and in some cases up to 80% for very creditworthy clients with prime property . Given GCBs often cost many tens of millions, loan amounts can range from a few million up to S$100 million or more . For example, if you are purchasing a GCB valued at S$30 million, a bridge lender might fund roughly S$21 million (70% LTV), though the exact amount would depend on their risk assessment and possibly additional collateral or guarantees. The minimum loan size is usually around S$1M. Keep in mind that borrowing, say, 70% on a GCB may also involve significant interest costs due to the large principal, so some borrowers choose to take a smaller bridge loan (e.g. just enough to cover the downpayment or shortfall) to minimize interest, if they have other resources for part of the purchase.

While bridging loans for GCBs carry higher interest than standard home loans, lenders strive to make rates competitive given the usually strong collateral. Interest might be in the ballpark of 0.5% per month (approximately 6% p.a.) to 1% per month (~12% p.a.), depending on the loan-to-value and the borrower’s profile. Many GCB bridging facilities are structured with interest-only payments during the term – for instance, you might pay just the monthly interest, and repay the entire principal at the end when your funds come in. Lenders may also be more flexible with GCB bridging terms: loan tenures could be longer than typical, sometimes up to 18-36 months if necessary , to account for the time it might take to arrange a large mortgage or to divest other assets. There are usually no lock-in periods; you can refinance or repay early if your long-term loan is ready, which you’ll want to do to save on interest. It’s important to note that, although rates are higher than bank loans, the emphasis is on speed and flexibility – bridging lenders focus on asset value and can work outside traditional banking constraints to get you the funds when you need them.

Despite the large sums involved, reputable bridging finance providers can move very quickly for GCB transactions. In-principle approval can often be given within 24 hours since they primarily evaluate the property and macro conditions, not intricate income documents . After approval, actual drawdown of the funds might take a few days to a week once legal paperwork (like charge/caveat on the property) is in place . In some recent cases, lenders have structured multi-million dollar GCB bridge loans and delivered funds in under a week to meet tight completion deadlines. This speed is one of the major benefits – it’s much faster than trying to get a tens-of-millions loan from a bank (which would involve lengthy due diligence and approval processes). To facilitate speed, borrowers should ensure they have ready all necessary property documents and proof of their exit plan (e.g., term sheets for refinancing or evidence of assets to be sold).

The primary collateral will be the Good Class Bungalow itself. Given the exceptional value of GCBs, that alone often suffices to secure the loan (subject to the LTV limits). Lenders will conduct a thorough valuation of the GCB, considering its land size, location (only certain prime districts qualify as GCB areas), and market demand. In some situations, if you seek a very high loan amount relative to the GCB’s value or if additional comfort is needed, the lender might accept multiple properties as collateral . For instance, an investor with other luxury properties could offer a second property to support a larger bridge loan or a higher LTV. Personal guarantees might also be required in some cases, especially if the borrowing entity is a company or trust. However, no additional collateral is usually needed if the GCB’s value covers the loan and the exit plan is solid. The loan will be secured via a legal charge on the GCB (meaning the lender has first claim on it until the loan is repaid).

The exit strategy is typically either refinancing or asset sale, similar to other bridging loans but on a larger scale. For a GCB purchase, the common exit is to refinance into a long-term mortgage with a private bank once the purchase is completed. Many GCB buyers line up a private banking facility that might require some conditions (such as transferring assets under management) and use the bridge loan to span the gap until that mortgage is drawn down. Alternatively, if the GCB bridging loan was used to raise funds for another purpose (like business investment or bridging a short-term need), the exit might be the sale of the GCB or another property at a planned time. Because GCB loans can be large, sometimes the exit involves selling multiple smaller properties or other assets to pay off the loan. Lenders will scrutinize your exit plan before approving the loan – e.g., if you say you will refinance with Bank X, they may want evidence that Bank X has issued a letter of offer (or at least a pre-approval) for the refinance. Given the high stakes, you should always have a clear and feasible exit plan (and perhaps a contingency) when taking on a GCB bridge loan.

The primary risks are similar to any bridging loan, but magnified by the amounts involved. If your exit plan falls through – say, you face delays in securing the long-term financing or your assets don’t sell as quickly as expected – the cost of holding the bridge loan can escalate quickly due to interest accrual . Prolonged inability to refinance or repay could ultimately lead to default, putting the GCB (and any other collateral) at risk of forced sale by the lender. Additionally, interest rates can be floating or subject to change, so interest costs might rise if the loan drags on (though some bridging loans fix the rate for the short term). Another risk is over-leveraging: taking the maximum loan might leave little room for error if the property valuation changes or if the eventual mortgage loan amount is lower than anticipated. However, these risks can be managed – by planning conservatively (e.g., assuming a lower refinance amount, or having extra funds or assets that can be liquidated in a pinch) and by maintaining communication with the lender. It’s wise for GCB buyers using bridge loans to work closely with experienced mortgage advisors and have backup plans, given the high value of the asset involved. When used prudently, a bridging loan is a helpful tool; but borrowers must be sure they can execute their exit, to avoid the considerable financial fallout of a failed bridging strategy.