What is a Bridging Loan?

Bridging Loans

Bridging Loans Explained

When you are urgently in need of short-term access to funds, the best available solution for you might be bridging finance.

Bridging loans are secured against a property asset and is capable of offering funds while your Business is awaiting property sale or long-term financing.

Based on the purpose and criteria, presently, the minimum rate is 0.65% per month and for a term of usually up to one year.

It is mostly used in property purchases, they can also be used to raise capital for several forms of businesses, refurbish property or make asset purchases.

Bridging loans help to bridge the gap between the need for readily available funds and long-term financing solutions by offering a timely release of funds. Perfect examples are traditional mortgage or other loans.

Based on the purpose and criteria, presently, the minimum rate is 0.65% per month and for a term of usually up to one year, although payment period can be negotiated either at the initial stage or throughout the compromise reached for the bridging loan at the beginning.

What Is A Bridging Loan?

Bridging loans are used to bridge the gap between anticipating debts and source of credits becoming available. Therefore, bridging loans are a famous short-term funding option.

How Does Bridging Finance Work?

Similar to other forms of loan, bridging finance is a loan secured using your property as collateral. In view of this, it can be referred to as a short-term mortgage. Ability to access this loan saves you from financial embarrassment when your long-term finance or property is still pending.

Bridging loans are well known when it comes to property purchasing situations due to the fact that they allow you to break the property chain and proceed as though you have the benefit of a sold property.  This helps in speeding up the process of acquiring new property.

It can also come to your aid when there is an urgent need to raise capital. For businesses purpose, bridging finance is a way to create awareness about your product in the market while long-term financing is still being arranged. A Bridging loan can also come to one’s aid if there is a need to purchase business assets urgently and long-term financing is going to take a long time.   

Bridging finance is a perfect way of raising fast capital for all kinds of business as well as  perfect way to introduce a product to market quickly while long-term financing is still under process.

Agreed, bridging finance is not adequate for every situation. It does demand property assets for security and the payment terms are usually within a year. The minimum rate of interest is 0.65% monthly, based on purpose and other criteria. While this can be an affordable option, these rate most times work out higher than the APR of a longer-term loan.

Bridging loans help you grab other existing opportunities. You might be able to negotiate a better offer in terms of the purchase price or making an auction purchase by securing an immediate finance in place before a long-term loan would be available. It is advisable that you compare different available loan options to get the solution that satisfies your need at the best available price. 

How to apply for a Bridging Loan?

Applying for a Bridging Loan is very simple. Click the link below or call 0161 8211478 to speak with one of our specialists.


Finally as members of the Financial Intermediary and Broker Association you can be assured of a great service. https://www.fiba.org.uk/

Finance approval is subject to status and terms and conditions apply.



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