BRIDGING LOANS
DON’T DELAY WHAT YOU CAN DO TODAY
Bridging loans are used when you need to pay for something new while waiting for funds to become available from the sale of something else.
Bridging finance is usually a type of short-term secured business loan. It’s best thought of as a temporary loan which gets you from A to B, until you can either clear the loan in full or secure a more permanent form of finance. That’s where the “bridge” idea comes in – finance bridging a gap to get you from one place to another.
LENDERS LOOK AT 3 KEY THINGS WHEN THEY ARE ASSESSING A BUSINESS FOR BRIDGING FINANCE
CREDIT RATING
This is the credit rating of the borrower using credit reference agencies such as Experian.
SECURITY
This is an assessment of the property used as security – what is the value of it normally and what is the value of it in a forced sale over a reduced selling period (these can change dramatically depending on lots of factors such as location).
EXIT
The exit is how the borrower plans to repay the lender when they are at point B – usually through refinancing onto a more conventional mortgage or the sale of the asset which realises it’s value and repays the lender, hopefully leaving the borrower with a profit!
- Funding that grows with your business – releasing more cash as you need it
- Uses security in your business meaning limited personal security (if any)
- Use finance for any purpose
- Can have credit insurance bolted on