Bridging Finance Loans

Bridging Loans are basically loans secured on property that are typically arranged quickly and taken out for a short period of time. Secured on property, they can help with broken purchase chains, which is the traditional use, but more and more they are being used by businesses for other reasons. Paying an urgent bill while waiting for long term finance or raising business capital are both legitimate uses for modern bridging clients.

Sort of. Compared to a standard mortgage, yes they are. That said, these aren’t standard mortgages, so you need to have an open mind. You are paying a premium for the convenience of being able to take out a bridging loan, which can be completed within a few weeks, or even days. Rates start at around the 0.6% per month mark though that can rise up to 2% or more per month. It depends on the circumstances and detail of the application. Give us a call to discuss the finance you are looking for.

If you want to work with us, you must be a limited company, we don’t currently deal with individual applicants.

This can vary quite dramatically. No doubt you will have seen promises of funds in 48 hours or within a few days. This is possible but it is by no means normal. Generally there shouldn’t be too much problem in having the money with you within a couple of weeks but you need to make sure your solicitor is able to perform – if they don’t work with the lender it can drag on.

Some do, some don’t.

You can pay the bridging loan back whenever you want. Depending on the specifics of your needs, there may be repayment or Exit Fees, though we will do our best to avoid them for you.

Often within a few hours – we don’t mess about.

As with a lot in life, it depends. The biggest factor is the value of the property, or properties, you are looking to use as security for the loan. We will take on cases that need funding from £25-30,000 up to multi million pound enquiries. There are lenders for all options, so whatever amount you need it is worth giving us a call, we can have a no obligation chat.

We don’t charge you an admin, commitment or whatever you want to call it fee upfront to take on your case. There are costs to consider, though. To go to a full application you will have to pay for a valuation, whether the loan completes or not and solicitors often want undertaking for their costs. Lenders will only want to start an application if they think it will complete, so it is not likely you are spending money for no reason. Our fee, would generally only be paid on completion of your loan.

The Short Answer is no. The longer answer is that bridging loans can be used for any legal purpose. We have had clients use them to pay an urgent bill and raise capital to fulfil an order.

Bridging providers will want to know how you intend to repay the loan, so that does need to be kept in mind but as long as there is a secure exit route, we can arrange your bridge for any purpose. These can be first, second or possibly even third charges and you can use development land to existing property as security.

As with all loans, the amount we can arrange for you will depend on the detail of the property and circumstances.

At the time of writing, absolutely there are. Since the credit crunch and banking crisis, banks have not been particularly active in the property market, standard mortgages aside. The demand for finance to trade properties has always been high, though, so bridging lenders have been more than happy to step in and take up the slack. This has seen the market grow dramatically with a large number of new lenders and options coming to the market.

Some are better than others and the lender we choose with you will be one that best fits your needs. It is not always about price, though the increased supply has driven prices down.
We need to figure out what is important to you, is it speed, flexibility or expertise in a sector that means the most?

Loan to values are back up to pre crash levels, more or less and there are options all over England, Scotland and Wales.

Different lenders have different sources of funding. Some are backed by hedge funds, some are wealthy families and there are private investors. Some will also have money via credit lines from other lenders.

For you it doesn’t really tend to matter. You will be dealing with a lender that has its own rates, terms and ways of working.

As with most answers I seem to give – it depends!

The specifics of the enquiry will determine what level of bridging loan you can raise on a property. It is going to be dependent on what sort of building it is, the value, location and the general market in that area.

For a bog standard residential loan it is possible to get up to 75% of the properties value, though that will likely have interest and fees taken off it, to give you a net loan (see below) that is some what lower.

Other types of security, like land or a commercial property will probably be lower in loan to value terms though there are still plenty of options.

Lenders typically provide loans from 6 – 24 months so there is plenty of flexibility there. Let’s be frank, though, at these higher rates you don’t really want to be borrowing the money for longer than you need. That needs to be balanced against the fact that you don’t want to go past the loan term. Bridging loans are lent out for a specific period of time, going past that generally ends up meaning a higher rate, sometimes much higher, and potentially fees as well.