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Is a Bridging Loan Right for You?

bridging loan

A bridging loan is a specialist type of secured loan, offering fast access to significant sums of capital for short-term repayment. Quicker and easier to organise than a conventional mortgage, bridging finance can provide a real lifeline when time is a factor.

But how can you determine whether you are an appropriate candidate for bridging finance? What factors need to be taken into account when considering a bridging loan, and how does the facility work?

Key Questions

Determining whether a bridging loan could be suitable for your needs is as simple as considering a few key questions. If the answer to each of the following is ‘yes’, a bridging loan could be just the thing:

  • Are you looking to borrow between £50,000 and £10 million?
  • Do you have assets of value (security) to cover the costs of the loan?
  • Will you definitely be able to repay the loan within a few months?
  • Have you considered additional borrowing costs and interest rates?
  • Are you a UK resident at least 18 years of age or older?
  • Can you provide evidence of your planned exit (repayment) strategy?
  • Do you need to get your hands on the money as quickly as possible?

Bridging loans have become a popular alternative to conventional mortgages and High Street loans, which can be complex and time-consuming to arrange.  In addition, bridging finance is also a far more flexible facility, which does not discount applicants on the basis of the usual ‘binary’ factors.

Hence, if you are looking to borrow significant sums of money over the short term and you have complete confidence in your ability to repay the loan in full within a few months, a bridging loan could be ideal.

The Benefits of Bridging Finance

Popular applications for bridging finance include picking up properties at auction, avoiding property chains, clearing debts and improving business cash flow. Bridging finance is much easier to arrange than a comparable loan or mortgage, making it an attractive option for businesses and households alike.

But a fairly straightforward application process is far from the only benefit of bridging finance. Additional points of appeal to consider as a prospective bridging loan applicant include the following:

1. Fast Access to Significant Sums of Money

Irrespective of how much you need to borrow, a bridging loan can be organised and accessed in a matter of days. With the help and support of an experienced broker, the money you need for any purpose could be in your account in less than a week.

2. Flexible Repayment Options

Borrowers have the option of choosing from a wide variety of flexible payment options, with repayment terms of anything from a few weeks to two years.  During which, interest can either be paid on a monthly basis, or rolled-up into the final loan balance to be repaid later.

3. Subprime Applicants Considered

Poor credit and even a history of bankruptcy will not automatically result in a bridging loan application being rejected. Bridging finance specialists are much more flexible in their approach to determining eligibility, assessing applications by way of individual merit.

4. Low Monthly Interest

The interest payable on a bridging loan can be as low as 0.5% per month – sometimes even lower. Where a bridging loan is repaid promptly after just a few months, it can be a uniquely affordable facility for short-term borrowing.

5. No Restrictions

Most lenders place no restrictions on how their bridging loans can be spent. Conventional loans and mortgages can only be taken out for specific purposes, whereas a bridging loan can be used for any legal purpose whatsoever.

About the Author:

Craig Upton supports UK businesses by increasing sales growth using various marketing solutions online. Creating strategic partnerships and keen focus to detail, Craig equips websites with the right tools to rank in organic search. Craig is also the CEO of iCONQUER, a UK based SEO company and has been working in the digital marketing arena for many years. A trusted SEO consultant and trainer, Craig has worked with British brands such as djkit.com, UK Property Finance, Serimax and also supported UK doctors, solicitors and property developers, gain more exposure online. Craig has gained a wealth of knowledge using Google and is committed to creating new opportunities and partnerships.

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