What is an exit strategy?

An exit strategy is how you plan to repay your bridging loan. Its main purpose is to demonstrate to your lender that you are able to pay back your loan. Most lenders will evaluate your exit strategy to make sure that you have a practical plan in place to pay back the loan. It is important to have a clear exit strategy as it minimise the risks between both the lender and the borrower. This is because it gives you a plan and the lender the confidence on your ability to repay the loan at the end of the agreed term.

Why is it important to have an exit strategy?

It is important to have an exit strategy for several reasons, including:

Lender confidence

Lenders require confidence that borrowers can repay their loans. A well-defined exit strategy demonstrates to lenders that you have a plan in place, boosting their confidence in your ability to repay the loan.

Quick loan approval

A clear exit strategy can speed up the loan approval process, giving the borrower quicker access to the necessary funds.

Financial stability

A good exit strategy minimises the risk between both parties involved. It helps borrowers navigate through various scenarios, ensuring that they are prepared for any challenges that they may encounter.

What are some examples of an exit strategy?

When considering an exit strategy for repaying a loan, the key is to have a well-organised plan that aligns with your financial circumstances and goals. For example:

Property sale

Landlords who own many properties often use this approach. This exit strategy is where the money that is earnt from selling a property is used to pay back the loan. This is also common amongst residential buyers who want to take a house off the market before selling their current property.


Use the revenue generated by the business to make regular loan payments.


Refinance the existing loan by obtaining a new loan with more favourable terms, such as lower interest rates or longer repayment periods.

Sell assets

Sell assets such as equipment, inventory, or property to generate funds for repaying the loan.

These examples highlight the various ways individuals and businesses can approach repaying loans, and the most suitable strategy depends on factors such as the nature of the business, financial conditions, and the terms of the loan. It's essential to communicate with advisors to choose an exit strategy that aligns with your specific circumstances.

How to create an exit strategy

Creating a solid exit strategy for loan repayment involves careful planning and consideration of various factors. Here are steps to help you develop an effective exit strategy:

Understand the terms of your loan

Familiarise yourself with the terms of your loan, including interest rates, how often you are due to repay the loan and whether there are any penalties for early repayment. This information will guide your strategy.

Assess your financial situation

Evaluate your current financial status, including income, expenses, and savings. Understand how much you can comfortably put towards loan repayment without putting your other financial goals at risk.

Set financial goals

Define your short-term and long-term financial objectives. This could include saving for emergencies, investing, or buying a home. Your exit strategy should align with these goals.

Create a repayment timeline

It is important to consider how long you will need the loan for. Develop a realistic timeline for repaying the loan. Setting a timeline provides a structured approach to repayment.

Emergency funds

Before repaying the loan, ensure you have an emergency fund in place. This fund acts as a financial safety net, preventing you from going into more debt in case of unexpected expenses. Having emergency funds could help your application as it shows a well-prepared plan to your lender.

Monitor your exit strategy

Regularly review your financial situation and adjust your strategy as needed. Life circumstances change and your exit strategy should be flexible enough to accommodate these changes.

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Our flexible approach


We are proud to be a lender who can deliver loans at a fast approach, to consumers. We make this possible by carrying out our own legal checks, in house for loans under 100k, within hours. We can offer automated valuations, which are available to produce financial solutions in an instant.

Mercantile Trust regularly help their customers carry out renovations with heavy refurbishment loans, by providing finance fast.

No minimum income

At Mercantile Trust, we put our customers at the forefront of what we do.

We offer top slicing, where we can use your personal income when carrying out affordability calculations. If your rental income does not cover your mortgage repayments, we will top up the remaining amount that you cannot cover so you are able to get the loan you require.

No Exit Fees

We want you to be in control of your finance.
With no early repayment or exit fees, Mercantile Trust will strive to find a loan to meet your financial requirements.

Our bridging loan criteria

We aim to help absolutely everyone, however there are certain criteria that must be met in order to make a successful application:

  • Unregulated bridging applications only
  • Rates from 0.99%
  • Up to 75% loan to value
  • Most property constructions accepted
  • No personal income requirement
  • No exit fees
  • Minimum property value £75k
  • Minimum advance £25k max £500k
  • Confirmation of exit required
  • Minimum of one buy to let or residential property required
  • Serviced and rolled interest available
  • No ERC (Early Repayment Charge)
  • First and second charge available