Did you know that you could pay your tax bill with a short term bridging loan?
Bridging loans are a flexible and innovative funding vehicle for a wide range of purposes and the experts at the Bridge Crowd can help.
So, whether you are a business owner or a property developer needing access to funds to pay off a tax demand from HMRC then a bridging loan could be the solution.
You might be a business owner and find your business is struggling financially because of unpaid invoices and have various issues with cash flow.
However, a bridging loan that is secured against a property you own could be an effective way to raise finance to repay a personal or corporate tax bill and also help you get back into better financial health.
Bridging loan funding
If you’ve never considered bridging loan funding, then they are short-term financial product and you need to be aware of how you will repay the funds when the loan is due.
A bridging lender will refer to these as ‘open’ loans, which means you do not know when you apply how you will be able to repay the money, and ‘closed’ loans which means you do know when you will have the finance available.
As mentioned earlier, bridging finance is a short-term offering and most lenders offer sums ranging from several thousands of pounds to several millions of pounds for up to a year, though some do offer lending terms of 24 months.
One of the big reasons that people look to use a bridging loan is that they can be arranged quickly and are used generally as the temporary measure until funding is in place; essentially the loan is a bridge between your need for cash and when permanent funding is resolved.
Arrange bridging finance
But how quickly can you arrange bridging finance?
If you already have a relationship with a bridging finance lender, then this can be arranged in as little as 24 hours while other bridging lenders will need several days for the finance to be organised. It needs to be appreciated that the application process is quick without the need for complex application forms that high street lenders may require.
Among the reasons for the longer period to complete a bridge loan applications is down to the lender needing a surveyor to evaluate the property asset and the legal paperwork will need to be organised.
Bridging finance is also growing in popularity because it’s not only quicker to organise than from a high street lender, for example, but also because these high street lenders have tightened their lending criteria whereas bridging finance companies will look at a range of borrowing requirements.
The most important will be the value of the asset being offered as security and some lenders will not pay close attention to the previous financial and credit status of the applicant.
The other big reason why bridging finance has grown in popularity is that the finance can be used for a wide range of purposes. There’s few if any restrictions for most lenders on what you use the money for.
While many will use the cash for buying property or refurbishing premises, others are using bridging loans to buy stock for a promotion or to buy business premises.
This means that should you need money quickly to pay a tax demand then a bridging loan lender could be the ideal solution you are looking for.
Calculator for their bridging loan rates on their website
While these loans are aimed at short-term borrowing needs, potential borrowers also need to appreciate that there is a wide range of costs involved and many lenders will have a calculator for their bridging loan rates on their website.
This calculator will make it easier for you to judge whether this type of loan is for you and your needs and will also highlight what the total costs will be.
Some firms will have an administration and surveyor costs, others will add in legal fees and all will offer different interest rates depending on the amount being borrowed and for how long.
Also, should the property being used as security be on a second or first charge, then this will also impact on the rate of interest being charged by the lender.
There’s a lot to recommend bridging finance and if you are looking to pay your tax bill with a short term bridging loan then you need to speak with the experts at the Bridge Crowd to find out what they can do for you.