Business financing simplified

Bridging Finance

Business financing simplified

Bridging Finance
in a nutshell

Bridging loans are short-term secured loans, traditionally associated with ‘bridging the gap’ between buying a new property and selling an old one. They are often used by property developers to bridge the gap between the purchase of a property and organising longer-term finance like a mortgage.

Bridging loans are often used in tandem with development finance. Either to help purchase the property, or as an exit strategy when a project is completed, whilst longer-term finance is organised.

Sometimes, a bridge can be used for business purposes, as a quick and cheap alternative to an unsecured loan. Bridging loans are renowned for speed and flexibility and can sit behind a traditional mortgage either as a second charge or sometimes third.

Typically, lenders will lend up to 70% of the value of the property, either 1st, 2nd or 3rd charge. You as a borrower will have to pay for the valuation (although some lenders do desk-top valuations for easier, more time-sensitive deals) and lawyer fees of the lender. As long as the valuation report matches your expectation of the property’s value, and the lawyers find nothing untoward, lending should be released quickly.

Some of our lenders

Speed

Bridging Loans can be wrapped up in as little as 2 weeks.

BENEFITS

Flexibility

Bridging lenders are renowned for being extremely flexible, often extending terms or allowing interest repayments ad-hoc. They will often endeavor to work with you as much as possible.

BENEFITS

Retained interest and fees

You do not have to make monthly payments, there is just one settlement payment at the end of the term.

BENEFITS

Loose criteria

When compared to traditional property lending products, fixed criteria are virtually non-existent in bridging finance. As long as you have the required collateral, you should be able to access finance.

BENEFITS

Who is Eligible?

Virtually anyone with equity in a property that is not your primary personal residence.

How does it work?

1. Application: You will need the property value, the exit plan and how much current debt on the property, and your own personal details.

2. Valuation: a RICS surveyor will likely travel to your property to value it, although this may be undertaken remotely as a ‘desktop valuation’.

3. Funding:  So long as there are no legal or valuation hiccups, funds can be released very quickly (24-48h) after the valuation is approved.

How Much Does It Cost?

FAQ's

As little as 72 hours in some cases.

Yes, as long as you can demonstrate how you will do this.

The biggest risk is that you do not have a viable exit route. Bridging is considerably more expensive than a mortgage, and the interest can build up quickly if the facility isn’t exited in a timely manner.

Qualifing questions

Can I Borrow?

Get Invoice Finance

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Get Invoice Finance

Please pop your details in the form below and we’ll get back to you within 24 hours.

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