Case Study · Singapore

Private Equity Investor Took a Temp Bridge Loan to Cover Home Renovation

13 February 2023

Private Equity Investor Took a Temp Bridge Loan to Cover Home Renovation

A private equity investor took out a temporary bridge loan to finance a home renovation project. The bridge loan served as a short-term financing solution, allowing the investor to complete the renovation work and then refinance with a more permanent loan once the property had been updated. The loan was used specifically for the renovation work and was expected to be paid back relatively quickly, typically within a few months to a year.

  • Location: Singapore
  • Market Value: $1,000,000
  • Loan Amount: $550,000
  • Loan-to-Value: 55%
  • Duration of Loan: 6 months
  • Payment Schedule: Monthly
  • Asset Type: Asset Pledge
  • Completion Time: 1 week

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FAQ

Can I borrow short-term to cover a home renovation?

Yes. The case here lent $550,000 against an asset pledge in 1 week to fund renovation works on a Singapore home. Renovation bridges typically run 6 to 12 months, exiting via either a long-term mortgage refinance once the upgraded property is revalued, or from your other income.

What kinds of assets can I pledge as security if I do not want to mortgage my home?

We accept share pledges, fund unit pledges and certain investment-portfolio assets in addition to property mortgages. The PE investor here used an asset pledge rather than tying up the residential property itself, which kept the home unencumbered for the long-term mortgage refinance.

How quickly can a home-renovation loan be drawn down?

1 to 2 weeks is typical for a clean asset-pledge or property loan, as in this case. We need the asset valuation, KYC and a basic project budget. The funds can be drawn in tranches as renovation milestones are reached, which keeps your interest cost down.