For anyone looking to access short-term finance then they will need to spend some looking to get the best bridge loan funding deal possible.
With a wide range of lenders now working in the market and offering a range of deals and interest rates, the potential borrower needs to tread carefully and research thoroughly what they are wanting from a potential bridging loan and from their lender too.
Even though bridging loans are growing in popularity as a short-term funding option, not everyone appreciates what they are.
A short term bridge loan
Essentially, a short term bridge loan is a way to bridge the gap between a debt that is due and having the money to pay for it; most people appreciate that bridging loans were generally used for buying a property while a current home was in the process of being sold.
However, the range of purposes for bridging loans have grown enormously in recent years and they aren’t just popular with people buying property but also with property developers and businesses too.
Bridging loans are also aimed at landlords looking to develop their portfolio and those wanting to buy a property at auction and who need to arrange funding quickly. Developers also use bridging loans to refurbish or redevelop a property for selling on quickly.
One reason for this is that they are easier to access than a high street lender and flexible as well.
But one of the drawbacks for a bridging loan is that they tend to be slightly more expensive than a high street bank loan but this is down to the flexibility and the ability to access funding quickly.
Bridging loans UK can be processed quickly
Bridging loans UK can be processed within a day or two, depending on the lender and the borrower’s own circumstances while for others their bridging finance arrangement can take a week or two if more legal and valuation work needs to be done.
Also, with banks tightening their lending criteria to make it more difficult to access large sums of money, bridging finance companies are more enthusiastic about the purpose for a bridging loan.
Potential bridge funding borrowers also need to appreciate that the lender may also charge an administration fee for processing an application and that the interest rates will need to be appreciated over the year, otherwise known as the APR.
Perhaps the best way to understand a bridge loan funding deal is to ask the helpful team at The Bridge Crowd for help and advice.