For those who may not appreciate it, a UK bridging loan in a nutshell is a short-term funding option for a property developer or a business.
Many use them to refurbish property or indeed buy a house at auction and there are a lot of other purposes for bridging loans too which is why they have taken off in popularity.
Essentially, the bridging loan is a source of funding that will help to ‘bridge’ the gap that may exist before a debt falls due and having the money to pay it.
One of the big attractions for bridging loans is that they can be used for a wide range of purposes and not just for buying property; they can be used to help stem a cash flow problem or help with unforeseen short-term funding needs.
Along with a growth in bridging loans, there has also been a rise in the number of lenders and they are willing to forward sums ranging from £2,000 and up to £5 million, for instance.
Bridging loan UK providers
The bridging loan UK providers can help meet a need within a few days, depending on circumstances, so bridging loans are also an effective and flexible way of providing short-term finance quickly.
As mentioned previously, bridging loans can be used by someone to refurbish or buy a property, and that property can be residential or commercial or it can help a business buy stock.
There is also a trend for property landlords to use bridging loans, particularly since the lending criteria from banks and building societies to help develop a portfolio have been tightened so they are turning to alternative forms of finance instead.
One recent survey pointed to mortgage brokers finding it increasingly difficult to find business mortgages for their clients, particularly landlords.
What the bridging loan rates UK are
However, for landlords who are looking for a short-term cash injection, they can appreciate what the bridging loan rates UK are when it comes to acquiring a property and will find that bridging loan lenders are more receptive to their needs.
Indeed, the same survey highlighted that two in three brokers who had failed to find a buy to let mortgage lender for a client did instead find a bridging finance lender willing to help.
Mortgage brokers say there has been strong demand in the south east of England for bridging loans which has risen by 50% in the last six months.
The attractions for bridge funding
Among the attractions for bridge funding is the option for a no minimum term and no exit fees when the loan is due; it is also possible not to repay interest during the loan’s term and this can be paid when the loan is due.
There’s a lot to recommend a UK bridging loan for a wide range of purposes but for more help and information about what they can be used for, then contact the team at The Bridge Crowd.