Is It Easy To Obtain Bridging Finance?
A bridging loan, what is it?
Basically, a short-term financing solution to either fund the purchase of a new property or refinance an existing one. Providing efficiently timed funds to cover the purchase, renovation, or development of a property, allowing for the transactions to move forward smoothly without delays.
Bridging loans are utilised by property developers, investors, and homeowners who require fast access to capital.
The criteria to obtain a bridging loan will vary from lender to lender, although generally will include the following:
The Property / Asset Value: The market value of the property used as security for purchase or refinance
The loan-to-Value (LTV) most funders offer bridging finance between 70% – 75% LTV for residential properties and between 60% – 70% for commercial properties.
Redeeming the finance –funders will require a clear exit plan for repaying the loan, either the sale of the property or the customer securing long-term financing. This will be asked at the outset.
Experience: For property developers, experience in similar projects can be a significant factor that is taken into consideration at outset.
Client Credit History: While not as tough as traditional mortgage loans, a reasonable credit history is still important and any oddities should be explained at outset.
Loan terms typically range from 1 to 24 months.
Minimum Loan Size: £25,000.
The maximum Loan Size: No maximum.
The minimum Interest can be as low as 0.45% per month.
Interest options – Interest can be rolled, retained, or serviced.
Borrower Residency: UK residents, UK expats, and non-UK nationals can apply dependant upon their country of origin
Borrower Type: Individuals, sole traders, LLP’s, partnerships, Ltd companies.
Types of security Residential, commercial, and semi-commercial property 1st & 2nd funding.
Funding Purposes: – New builds, refurbs, conversions, mixed use, development, and more.
A property valuation and the location are essential for the approval of a bridging finance loan
Funders will rely upon the value of the property being used as security to determine the loan amount and risk.
Should you use a finance consultant – finance adviser can prove very useful, if you are unsure about the bridging loan criteria and the financial adviser will assist you from start to finish.
Additionally, advisers have access to a variety bridging funders.
The CEO of Bridging Finance Now and Bridging Finance Capital commented –
‘We believe in mutual transparency is a must in all business transactions, leading the way to beneficial and rewarding accomplishments to all parties concerned in the raising of finance and timely completions for all the customers of Bridging Finance Now and Bridging Finance Capital’
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