How does it work?
Bridging loans are mostly used in order to supply funding for purchasing a new property, whole the borrower is waiting for their current property to sell or just raise short term finance. However, it is becoming a popular choice for the individuals with limited financial resources, particularly since the start the financial crisis. Bridging loans can assist borrowers in a variety of situations because they are not offered on the basis of the borrower’s ability to maintain normal payments. They can be employed for any purpose, as ling as the lender accepts the offered security and exit strategy. All bridging loan lenders will need to have a exit strategy for repayment before any funding will be approved. The term for repayment can be used to satisfy individual needs, the majority of bridging loans have a term less than a year.
Who needs one?
Anyone that is knowledgable about the loan facility and how it works and upside and downside, understands the modus operandi, and has a plan for repayment can borrow money through a bridging loan. Bridging loan companies have used by prospective residential or commercial property purchasers and developers. The funds could also be used for individuals that are seeking to buy a property, and develop it, and then put it back on the market for sale. Individuals in financial difficulty can use the loan to avoid repossession of their home. They are ideal for all people that need some money and space to arrange a longer term facility or to sell the property. Since the loans can range in value from £50,000 to £100M, there are lots of options available. The cost of the a bridging loan is expensive and a lot of people shy away once aware of the term and finance rates.
Benefits of Bridging loans
Bridging loans can be beneficial for providing a flexible form of finance for short period, which allows fast finance end a temporary injection of cash. Some bridges become available within as little as 48 hours after acceptance and all the legal requirements are in place. The loans have increased in popularity, so individuals can get finance through this financial product. Although, the company will review the borrower’s financial situation to ensure they can meet payments and have an exit strategy and even ask for additional security to be given. If the exit and full repayment is not properly executed, the individuals will face some heavy penalties that feel like a financial punishment.
There are many alternatives to bridging loans that potential borrowers should consider, such as secured loans, conventional mortgages and second charges over existing properties if equity is available, asset finance and commercial lending. However, bridges offer an opportunity to access funds very quickly.
Global Asset Finance can provide you with a bridging loan tailored to your needs, to find out more ring +44 (0) 7721 565802 or email us on firstname.lastname@example.org.