A bridging loan is a short-term loan that is popular for individuals and businesses when they need to settle a transaction in a short time period, and have not had the time to arrange funding. Funding can be arranged against commercial or residential property or other assets with enough equity.
Open-ended bridging products are ideal for companies who are cash poor, in many cases the business plans to sell a property and due to their money being tied up in the business, a bridging loan is a perfect short-term bridging facility that allows them to access funds in the interim. For professional landlords, property investors and developers, bridging finance is an integral part of their property funding strategy.
A bridging loan can be fixed-term or open-ended, if there is a date the money will be released and paid it is a fixed-term loan, if it depends on how long the sale of a property takes it is open-ended. A bridging loan can take as little as 72 hours to arrange and the term of the loan can be as little as 1 day and usually up to a maximum of 12 months.
Why use a bridging loan?
- To raise finance quickly
- To purchase new equipment or machinery quickly
- To refurbish a property
- To finish a development
- To buy at auction
- To purchase property that would not secure a mortgage in its existing condition with a mainstream lender
- To bridge a shortfall of funding between buying and selling property when a sale is delayed
- To raise a deposit for purchasing property
When choosing a bridging loan it is important to find one with a good exit strategy to ensure the loan can be repaid (either via sale or remortgage) to avoid high penalty interest rates. For more information on bridging loans contact our team…
Moorgate Finance Contact Form
01908 92 62 62 / email@example.com