Bridging Loans & Finance

A bridging loan is a short term loan that is used to acquire a property, to bridge the gap they can also be used as a means of releasing capital in a property, they are also frequently used by property developers instead of traditional development finance. In addition to a monthly payment for interest arrangements fees are also payable.

Bridging finance is also used to buy property at auction as they need to complete the purchase quickly and a bridging loan is the only finance option available to do this once a bid has been accepted the buyer only has 28 days to complete the purchase otherwise the deposit is lost.

Bridging loans can be completed in a very short space of time compared to other types of finance, some in as little as a week from the initial application. This makes them perfect for short-term funding that needs to be drawn down as a matter of urgency.

Our team of consultants have been completing bridging loans over many years and are used to dealing with the fast pace and requirements that are needed to get loans through on time and will as little effort as possible.

Some reasons to take out bridging finance.

A Bridging Loan for a Residential Property purchase or your existing home.

This is a commonly used option for a bridging loan, they can be used if you are in a property chain and one of the purchasers pulls out and you are in effect left without a crucial link in the chain to complete your purchase before selling the property a loan will enable you to carry on with your purchase without the need to wait for the person who has pulled out, you can work out your costs with our loan calculators.

You would also use one if you wanted to buy a new house but have not found a buyer for yours, or even if you have yet to market your own property.

Auction purchase Bridging Finance

After buying a property at auction you only have 28 days to complete, the auctioneer will want a non-refundable 10% deposit on the loan amount and you will have exchanged contracts and you will have to do all of the legal work and pay the 90% balance within 28 days of the auction. Buying at auction would be impossible using a traditional property mortgage.

What you would do in this situation is to arrange a bridging loan and complete the transaction and then you would have time to get a mortgage in place to pay down the bridging loan.

Renovation of property in poor condition

If the property you are looking to buy is in poor condition some mortgage lenders will not offer a mortgage on it, the only option available in these circumstances is to purchase the property with bridging finance carryout the works that are required to bring the property back into a mortgageable condition and then refinance with a long-term mortgage.

Buying undervalue property

When a property you wish to purchase comes onto the market at a cheap price it is usually because the vendor wants a quick sale. This is perfect for a bridging loan as you can make an offer and set a clear timescale for completion without waiting for a mortgage. This will give you an advantage over other buyers and bridging lenders can move very quickly to get you your funds.

Business cash flow

Often businesses require additional funding it could be bills or a requirement to expand or even buy new plant and machinery, if you have a property with equity in it then short-term finance is available to you with a bridging loan at a rate of interest as low as 4% per month.