ESG Bridging Loans

What’s an ESG Financing Bridging Loan?

If you’re in the property industry, sustainability and responsibility are becoming more and more valuable as time goes on. 

That is why ESG bridging loans from MS Lending Group provide a solution, offering short-term finance that helps investors and/ or developers align property projects with environmental, social, and governance goals – also known as ESG.

So what do ESG loans actually do to contribute to this goal? ESG financing combines the speed of bridging finance with the benefits of green lending, for instance, the funding could be used on improvements to a property’s energy efficiency, or supporting community-focused housing schemes.

Ultimately, ESG financing solutions work to allow borrowers to achieve their investment goals while making a positive impact.

What Sustainability Linked Loans Can Be Used for

The good news is, our sustainability linked loans can be used across a range of residential and commercial property projects, designed to encourage both financial and environmental returns. Examples include:

• Residential purchases up to 85% gross
• Commercial purchases up to 75% gross
• Projects with social housing providers, registered charities, and CICs

A signed agreement for lease with a Housing Association, Registered Provider, Charity, or CIC must be evidenced before loan completion, and all leases must have at least 10 years unexpired.

These conditions ensure that our green lending products deliver genuine benefits for all.

Energy Performance Features of ESG Bridging Loans

One of the standout features of our ESG bridging loans is their link to property energy performance. 

At redemption, MS Lending Group will refund £1,000 of the total gross loan amount if improvements have been made to the EPC rating during the term of the loan (with a minimum C rating required).

This reward structure ensures that investors benefit not only from potential property value uplift but also from reduced running costs and improved marketability. 

By tying financial incentives to sustainability outcomes, our ESG financing has the potential to directly support borrowers in creating greener, more efficient buildings; what you need to know is…

• Copy of current EPC rating required before completion
• Updated EPC evidenced on redemption
• Available on both purchases and cap raises
• Residential properties only
• Energy Performance products only available for loans paid back within the term agreed

Features of Our Green Lending ESG Loans

• No minimum Bridge term
• 2% arrangement fee
• Exit fee – 1 month interest
• Unregulated Bridging only
• Valuations may be required on receipt of application
• No minimum loan size
• Max loan £3 million or higher on request
• 1st charge business only
• Up to 12 months Bridge as standard
• Up to 18 months Bridge on request

Choose MS Lending Group for ESG Financing

At MS Lending Group, we understand that the property sector plays a key role in working together towards a more sustainable future. Our ESG loans and green lending products are built around these principles and understand the pressure you may be under in the property industry. 

By choosing us, you’ll work with a lender that delivers fast yet reliable sustainability linked loans, all the while rewarding you for creating energy-efficient properties. 

So, whether you’re working with us for our goal of supporting social housing providers, or incentivising higher EPC ratings, our ESG financing ensures your project meets today’s market demands.

For more details on how our ESG bridging loans can support your project, contact MS Lending Group today.

What people are asking…

“I’m buying a D-rated buy-to-let and planning new insulation, glazing and a heating upgrade before letting. Can an ESG bridging loan reward me for taking it to a C?”

In short, yes, a residential property investment could absolutely be suitable if you obtain an ESG bridging loan from the likes of us here at MS Lending Group, provided that you intend to improve the property’s energy efficiency during the term of the loan.

The product is intended to promote an increase in the rating of a property’s Energy Performance Certificate (EPC). In the case of buying a property that has a D rating for its EPC and making eligible improvements so as to raise the rating to at least C before the loan is redeemed, you may be entitled to a refund of £1,000 equal to the gross amount of the loan at the time of redemption, provided that the product’s terms and conditions are met.

Measures that could take you there are for example, fitting insulation, upgrading the glazing or replacing an inefficient heating system, all of which could possibly improve the property’s energy performance.

But the final EPC rating will be determined by the property in question and the results of the assessment; remember, you must submit the current EPC before completion and one that has been updated at the time of redemption in order to show that the necessary improvements have been carried out.

“I’ve agreed a ten-year lease with a housing association on a block I want to buy. Can I use ESG bridging finance to complete the purchase before the lease starts?“

Yes, it could be used as ESG bridging finance can be appropriate for property investors who are buying residential or commercial property in order to carry out a qualifying social housing project, this including cases that involve housing associations and registered providers.

What has to be considered is whether the proposed lease arrangement satisfies the lender’s eligibility criteria. In the case of the social housing aspect, to get an ESG bridging loan, a signed agreement for lease must be in place before the loan is completed and there must be at least ten years left on the lease.

It is necessary to have the required documentation completed and at the lender’s disposal before taking any further action.

Provided that underwriting is carried out and taking into account the circumstances of the property, lending could be offered up to 85% for residential property and 75% for commercial property.

At MS Lending Group, we will be able to look at the property, the proposed lease and the transaction timetable in order to find out if the project may be eligible.

“I already own a rental property with a poor EPC and want to raise capital to fund energy improvements. Does a sustainability linked loan work on a capital raise, not just a purchase?”

Yes, as ESG bridging finance is not always restricted to the acquisition of a new property, in fact ESG bridging products offered by the likes of our team at MS Lending Group may also be applied to eligible residential capital raises, enabling property owners to obtain funds for planned improvements while still owning the property.

For instance, you might have a property that you are renting out of which has a low EPC rating and wish to finance insulation, better glazing or a more efficient heating system. A capital raise could give you short-term financing for the work, on the basis of the property’s value, the amount of the proposed loan and the lender’s evaluation.

You must provide the current EPC before completion and a revised certificate at the time of redemption in order to show that the required rating has been obtained. Get in touch with MS Lending Group to find out if a sustainability-linked capital raise could support your property’s improvement plans.

What People want to Know…

Do you offer green incentives for energy-efficient social housing developments? Working on a carbon-neutral project.

Yes, we do and a carbon-neutral project is exactly the kind of development our ESG bridging loans were designed to support. At MS Lending Group, we completely understand that social housing plays a vital role in meeting community needs, thus, we’ve aligned our green lending products to help Registered Providers, Housing Associations, Charities, and CICs deliver energy-efficient homes. With our ESG financing, we actively reward sustainable improvements, this applies across both standard residential properties and social housing projects; yet in your case, carbon-neutral housing schemes, these incentives are even more relevant. Why? Because social housing tenants benefit enormously from reduced running costs thanks to energy-efficient construction, while providers meet their long-term sustainability commitments. By offering tailored sustainability linked loans, we support these dual goals: financial viability for the developer and long-term affordability for tenants. A carbon-neutral project fits perfectly with our approach to bridging loans, so if your development is designed with sustainability at its core, we can provide finance that not only supports your immediate funding needs but also rewards you for delivering long-term positive change.

Do you offer better rates for developments with EPC improvement? Converting D-rated offices to A-rated green workspace.

Yes, developments that significantly improve their EPC rating, for instance like your conversion of D-rated offices into A-rated green workspaces, are exactly the kind of projects our ESG loans are designed to assist. Through our ESG bridging loans, we encourage by incentivising borrowers to invest in energy performance upgrades by offering a £1,000 refund on redemption when the EPC has been improved during the term of the loan (with a minimum C rating required). This incentive is designed to be a clear signal of our commitment to green lending and to reward borrowers who align their projects with sustainability. In practical terms, an upgrade from a D rating to an A rating represents a huge step forward, embedding all factors necessary that reduce risk from a lender’s perspective. That’s why we’re able to offer sustainability linked loans that reflect these improvements; by immersing ESG financing into our lending process, we make sure your project is recognised not just for its financial viability, but also for its environmental performance. Converting office space into a high-performing, energy-efficient workspace also responds directly to market trends. Many tenants and corporate occupiers now demand sustainable buildings, and local authorities often encourage this kind of regeneration. So yes, by choosing our ESG bridging loans, you can secure finance for your conversion project and benefit from incentives tied to your EPC improvement.