With a rapid growth in alternative finance lenders means there’s a growing appetite for short term bridge loan information from businesses and individuals alike.
Despite this growth in popularity and the fact that bridging loans offer flexible finance there are still lots of potential borrowers unaware of how beneficial a bridging loan can be for their purposes.
Indeed, these loans are now used for a wide range of property investments around the UK including those by developers buying property at auction and those wanting to refurbish or develop a property to sell on.
Now with many lenders offering bridging loans from several thousand pounds to hundreds of thousands of pounds means borrowers can use them for a wide range of short-term purposes.
Bridge loan funding is becoming popular with businesses
One reason that bridge loan funding is becoming popular with businesses is that they offer a route for a quick cash injection when it is necessary as well as offering funds to buy stock for a seasonal sales campaign or to refurbish a business premises.
The length of a short-term bridging loan can range from several months and up to two years but they are generally for 12 months. The term bridging helps explain that the finance is used to fund a particular need until the money for paying it becomes available.
Traditionally, bridging loans were used by people wanting to buy a house while their current home was in the process of being sold so they could buy the property knowing the money from the home’s sale would cover the cost of a bridging loan.
In addition, bridging loans are also easier to access and quicker to apply for than traditional forms of finance which means they offer flexibility for borrowers looking for a quick financial boost.
Borrowers looking to utilise bridging loans UK
Along with this flexibility, potential borrowers looking to utilise bridging loans UK should appreciate that they can be used for a wide variety of purposes including dealing with a financial emergency, helping to meet their business obligation and even raising capital for a project.
This means they are particularly suitable for business owners, property developers and investors as well as landlords, housebuilders and home buyers.
The big attraction for using a bridging loan is that it enables an investor, for instance, to take advantage of a business opportunity when it rises. This may mean that they can secure a lucrative property deal or they can unlock funds to deal with an emergency.
It should also be appreciated, however, that bridging loans tend to be more expensive than a traditional loan since they have a higher rate of interest and usually have an administration fee charged on acceptance as well.
For more help and information about what a short term bridge loan is, then contact the helpful team at The Bridge Crowd.