For anyone looking for UK bridging loans needs to appreciate that this is a specialist form of finance which is for a specific purpose which means that the interest rates may be higher than those for traditional loans.
Borrowers have a number of options including that of ‘rolling up’ the interest payments so they do not have to pay interest on a monthly basis but pay it when the loan is due to be repaid.
This element of deferring the interest payments is another reason why bridging loan finance is a popular route for accessing money quickly for a business when funding in the early stages of operation may need a boost.
Bridging loans can be used for a variety of purposes in the commercial world, essentially whenever a temporary short-term loan is needed then bridging finance is the solution but the borrower needs a clear exit plan from the loan.
Businesses looking for a short term bridging loan UK
It’s not just businesses looking for a short term bridging loan UK, property developers use bridging finance as a way to fund a project effectively since they may need a large cash injection at a specific point.
A property developer could, for instance, apply for a bridging loan for up to six months so they get finance to complete the building and when they come to sell the property, apartments or commercial premises they will then repay the bridging loan.
The bridging finance can be used for a variety of reasons from converting a property to refurbishment and renovations and the quick access to large sums means work can begin as quickly as the developer will receive the money sooner than a traditional lender can do.
It’s also possible that the bridging loan can be moved with some lenders onto a long term financial product, such as a commercial mortgage.
Popular use for a UK bridging loan
Another very popular use for a UK bridging loan is for buying at auctions since traditional lenders will take longer to approve an application whereas someone buying property, for instance, at auction will have 28 days to provide the funds to complete the purchase.
For many property buyers accessing bridging finance makes this an ideal solution and we will look in more detail about how to buy property at auction and how to finance a purchase in future blogs on the Bridging Crowd website.
Finding lenders of UK bridging loans is not that difficult but complying with the terms and conditions means it’s always best to consult with a specialist bridging loan broker or visit the Bridging Crowd website on a regular basis for more information.