In the current climate it’s no surprise that so many people are looking to get into the property market and investment with the profits and money that’s available to be made with demand soaring year-on-year and prices following broadly in the same direction.
Property development, in particular, has spiked in activity in the past few years with developers buying more land and property than ever with a view to improving or renovating and either renting it out or selling it on at a healthy profit.
When it comes to bridging loans and bridging finance, those who are experienced in the property market may well know these types of loans inside out, however, if you’re looking for advice about what bridging finance is then we’re going to run you through what you need to know about it.
Of course, bridging finance may be the ideal solution for you, but because we offer free and honest advice to our clients, we’ll ensure that we find the right solution for you and that may not be a bridging loan. With our bridging loan advice, we’ll give you all the information you need to be able to make the best choice.
Should I be using a bridging loan broker?
When it comes to bridging finance, there are a large number of providers who may be able to offer you a bridging loan, and so it’s not always easy to pick out the best provider unless you’ve got experience in the market and know who to approach.
That being said, approaching bridging finance providers individually can be extremely time consuming and, unless you’re experienced, you may not always know what information you’ll need to provide in your application in order to get approved and funded in as short a time as possible.
We can give bridging loan advice because we know exactly how time consuming and stressful it can be to go through this process on your own, and especially if you need quick access to loans, finance, or funding.
By going through a bridging broker you’ve then got access to good advice as well as quick access to a large number of lenders whilst a broker provides you with a list of your best quotes.
Are bridging loans easy to get?
Relatively speaking, a bridging loan or bridging finance are easier to get approved than most traditional lending such as a mortgage or a bank loan, mainly because lenders aren’t quite as focused on your personal credit history as much as what your track record is like in property development, the security you’re able to provide and what your exit strategy is.
As an example, when we’re giving bridging loan advice we’ll help our clients to understand what kind of deposit they may need, what types of assets they can use as security against any loans and what type of plan they need to show to lenders to prove they’re able to repay the loan on time.
If you’re able to understand and meet the criteria then yes, bridging loans and bridging finance is relatively easy to get in that regard.
Advantages of a bridge loan
As we’ve mentioned, there are advantages and disadvantages to a bridging loan, so we’ll run you through them. When we offer our clients advice, we do it in their interests and ensure that we’re offering them the best possible solution for their own personal situation.
Fast
When comparing a bridging loan with other types of traditional finance it’s absolutely true that bridging finance is much quicker to access than, say, a mortgage or a loan. In fact, if you take our advice and you’re able to meet the criteria then you could have access to your funds within 72 hours.
With a bridging loan, our clients most often tell us it’s the right choice because of how quickly they’re able to access the funds once things have been agreed.
Specialist and short term
Bridging loan and bridging finance providers tend to have great experience with the types of projects and developments that our clients are looking to fund, and as such offer specialised terms and rates for them too. It often means that the interest rates are much better for them than if they’d gone to a traditional lender such a bank, and also means that they’re able to get the best possible advice and find it easier to get accepted in these circumstances.
Disadvantages of bridging loans
Because we offer the right advice in the right circumstances, we know that a bridging loan or bridging finance won’t always be the right solution for our clients, so here are some disadvtanges to consider.
Details
Bridging finance providers often want quite detailed plans of how you’re going to repay your loans and how you intend to clear your debt. Let’s say, for example, that you want a bridging loan to cover some short term cashflow problems, the lender will want to see how much you’re owed and when it’s due for payment and if those customers don’t pay you what your backup plan is for repaying the debt. If you’re not able to provide this level of detail it may be a better idea to look at alternatives.
Short term
We’re including this in both advantages and disadvtanges because this can work both ways. If you’re looking for a bridging loan to shore you up in the short term then it can be a very good idea to go for these types of loans, however, if you feel that the reason you’re looking to get loans may extend out over this short period then you will need to consider other traditional finance such as a mortgage or commercial loans.
Use our bridging loan calculator
We’ve included a bridging loan calculator to give you a better idea of what types of costs may be involved if you were to be accepted for a bridging loan. Ultimately, these types of loans are ideal for short term coverage and the interest rates are designed as such, so if you’ve got a situation in mind that you think may be suitable for a bridging loan use your calculator to see what it may cost.
Typical example of a bridging loan
There are lots of reasons why our clients may take out a bridging loan, but some good examples are listed here to give you a better idea of what they tend to be used for.
For example, a bridging loan may be able to cover the purchase of an auction property until a mortgage is agreed. It may be good for if a property chain breaks down and you need to purchase your next property before you’ve sold your own.
They’re also used to pay debts sometimes, such as inheritance tax, stamp duty or to stop bankruptcy petitions by creditors. These are just a few examples of what we see our clients use a bridging loan for.
Is a bridge loan the best way to finance a property?
That depends on what you define as financing a property. If you’re looking to finance a property over a number of years then a bridging loan isn’t the best way to do this, however, if you’re looking to cover a short term funding gap or to get funding to renovate a commercial or residential property then bridging loans are a good idea. Some clients, for example, will use them to develop a property before selling it on, or borrow against properties to enable some equity release or to extend a lease.
Can You Take Out Bridging Finance on a Property that’s Unmortgageable?
Lots of our clients will take bridging loans on a property that they can’t get a mortgage on due to it being uninhabitable, for example. Bridging loans are an ideal solution if you need funding to be able to renovate a property up to a better standard to be able to agree a mortgage on it so that you can rent it out. Alternatively, many of our clients will buy a property at auction that needs work doing to it to make it inhabitable and at a good standard before selling it on at a good profit.
Speak to one of our advisors today!
Our team are ready to speak to you today and give you advice on how we can help you with your situation.
After spending years in the industry and helping to finance millions in loans, our team know exactly how to help you out and find the right solution for your specific situation.
We’ve built a relationship with our lending panel over many years and as such we can offer you some of the best rates on the market as we’ve got exclusive deals and rates with our partners. We’re also able to call on a huge number of lenders to ensure that you’re getting the best possible terms and rates available to you.
Our brokers and advisors will be able to talk you through the application process from start to finish and let you know exactly what you’ll need to be in the best position to get accepted. They can help with things like business plans and exit strategies and our lenders know that we only submit quality applications, so get in touch today.