The purpose of a short-term bridge loan is to bridge the gap until a more permanent solution can be found. A bridge loan usually lasts between six and twelve months, but this is not a set term, and it can be extended with a new deal if certain conditions are met.
The purchase of a new investment property is often financed with bridge loans while the sale of an existing one is pending. The existing investment property doesn’t need to be sold before they can begin remedial work on the new one.
In chain purchases of investment properties, completion dates rarely meet expectations. As a result, investment properties can be bought, and turned around for sale or rental much more quickly with the help of a bridging loan.
Bridging loans are secured loans, so there are no set criteria or credit checks. With a secured loan, the borrower will be able to secure the funds against existing assets. You may qualify for a loan as long as you have enough capital in the asset being used as security.
Business Bridging Finance Options
A short-term bridge loan is typically available for up to 70% of the value of a property or asset. This type of loan usually has a higher interest rate than a traditional loan or mortgage. However, these charges can be more than negated when you take into consideration the savings, in both time and money, which are made from being able to begin work on the property sooner.
It is this instant finance that banks just cannot offer. In the wake of the previous financial crisis, banks have become increasingly wary about who, when and where they lend their money. In order to protect their return, there has been a drastic increase in set criteria and credit checks associated with both loans and mortgages. Having had a history of bad or adverse credit makes them more cautious or may even reject your application right away.
Getting a short-term bridge loan may be a solution to a financial dilemma when stuck in a chain, purchasing a property quickly, or for business purposes. Due to the flexibility of bridge loans, these types of loans are increasingly being used to help fund business applications;
- New or existing investment property renovations
- Staff wages
- New projects
- Large tax bills
- Large suppliers’ invoices.
Bridge Direct bridging loan solutions
So, if you’ve found a great investment property and don’t want it to lose value, or if you need to pay your staff quickly, a short-term Bridge Loan could be a good option.
Get an immediate decision on all Bridge Loan applications by contacting Bridge Direct today. With over 30 years of experience in the financial markets and the Bridge Loans sector, they can help you find the best deal for your needs.
If you call Bridge Direct, you will speak with a decision maker, not a broker. Bridge Direct have cut out the middle man!