When it comes to finding the best bridging loan, research is key since there is a wide variety of lenders who have a range of criteria they will agree lending for.
Essentially, a bridging loan fulfils a short-term financing need.
However, for anybody interested in bridging finance should be aware that they can be used for a wide range of purposes including buying stock for a business or for buying a property at auction, for instance.
For many borrowers, a bridging loan can be an invaluable way to buy a property that would not be possible otherwise; for instance, a building society may not offer a mortgage on a property in need of refurbishment.
Instead, a property developer could buy the property for refurbishment and pay for any works that need to be carried out by using a bridging loan and once the property has been brought up to the required standard then obtain a mortgage for it.
Repay the bridge loan
This means that the developer will have met their short-term financial need and have the funds in place to repay the bridge loan.
Most people are aware of bridging loans when they need to complete the purchase of a property but are still in the process of selling their current home when they need access to short-term finance.
Bridging loans have grown quickly in popularity in recent years but bridge loan lenders do charge slightly more in interest for the flexibility and accessibility of these loans.
Borrowers will also find that the lender has an administration fee and the interest being charged is on a monthly basis rather than on an annual calculation.
How they will repay the bridge funding
In addition, borrowers also need to consider carefully what their exit strategy is; this is simply knowing how they will repay the bridge funding and when.
It’s also important to appreciate that bridging lenders are growing in number and come in a variety of shapes and sizes and are capable of delivering loans from a few thousand pounds to several millions.
Another big attraction for bridging loan finance is that the loans can be arranged quickly and some lenders can do this in just a few days and all of them will do it much more quickly than a high street lender will, for instance.
For those who are interested in learning more about finding the best bridging loan then the helpful team at The Bridge Crowd can offer more help and advice.