Most people have heard of the term ‘UK bridging loan’ though they are also known as gap financing and even interim financing and are used for a range of financial solutions.
Bridging loans are aimed at individuals as well as businesses and are simply a way to access large sums of money very quickly when needed.
Indeed, when compared to the loan application process from a mainstream lender which can take weeks and even months for a business to complete, many bridging loan providers can deliver cash within a day or so.
That is usually for clients who have a demand for a quick turnaround and have, probably, already established a relationship with a bridging loan broker and provider.
This ability to quickly assess and approve a loan is one of the reasons why they are growing in popularity and the market for them is growing substantially. The efficiency and ease of getting the money is a huge plus point for many borrowers.
Big advantage for a bridging loan UK
The other big advantage for a bridging loan UK is that the timeframe for repaying the bridging loan is established at the beginning of the borrowing process.
In most cases, the funds for a borrower will be released within five to seven business days and the loan will end on a pre-agreed date when the funds must be repaid.
However, it’s also possible to take out a bridging loan without having to pay interest charges, and sometimes not even to repay a monthly amount, but simply repay everything, the loan plus interest, at the end of the loan’s term. This type of bridging finance is known as a closed loan since the borrower and the lender know when the loans period will be ending and when the money must be repaid.
More about bridging loan rates UK
While many people will repay an amount every month it’s also possible to ‘roll-up’ the interest charges so there are no repayments while the loan is running until it ends and the next article explains more about bridging loan rates UK.
Many bridging loan finance companies also offer what is known as open loans and these are bridging loans that do not have a fixed term. They tend to be slightly more expensive for this reason but for some borrowers they are an ideal finance solution.
The uses for a bridging loan are varied but they are most commonly used for people looking to buy a property while selling their current home; most lenders appreciate that when the home is sold there will be money to repay the loan and this is one of the most popular uses for bridging finance.
It also helps to explain why this type of finance is called a bridging loan since the money is used to bridge a need between someone needing to spend money and then having money coming in to repay the loan.
For anyone who needs more help and advice about a UK bridging loan and what they can be used for, then the helpful team at the Bridge Crowd will be happy to help.