A split-tranche bridge is a form of structured bridge loan where the total facility is divided into two or more tranches, each with its own interest rate, risk weighting, and drawdown conditions. This structure is often used in UK property development finance to align funding with project milestones, manage gearing, or price risk more efficiently. The first tranche may be used for acquisition or refinance, while the second tranche is typically conditional on planning success, pre-sales, or value uplift. It enables developers to optimise cash flow and retain flexibility across the project lifecycle.
Split-Tranche Bridge extends Structured Bridge Loan, dividing funding into tranches with tailored drawdowns, rates, and risk profiles matched to project stages. Unlike Interest-Deferred Bridge, which defers interest to ease cash flow, it creates distinct layers often secured via Cross Collateralisation. Lenders gauge viability through metrics like Contingency Adequacy (P50/P80), especially for tranches tied to planning consents or pre-sales in UK schemes.
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