For anyone who needs capital to fund a purchase then short term bridging loans could be an ideal solution.
The attractions for these loans are for those who, for instance, need to complete a property transaction quickly and this will include property developers who are looking to secure a great deal.
Bridging finance is also an ideal solution for those buying a property at auction since they have 28 days in which to complete the purchase.
Homebuyers are also likely to use a bridging loan, particularly if they are involved in a broken property chain which means the seller of a property can buy their new home before selling their current one.
The purposes for a bridge loan
However, the purposes for a bridge loan also extend to buying uninhabitable property, particularly the type of property that a traditional lender will not lend on. For instance, it may not have a kitchen, running water or a bathroom.
There’s also a need for those who are looking to develop or renovate a property with a view to finding another source of finance or selling it on when it is complete; a bridging loan is an ideal solution for those looking for short-term capital in these circumstances.
In addition, short-term bridging loans can also be used for a wide variety of other purposes and they aren’t all just about property with loans lasting for up to two years.
For those who need to know how much can be borrowed with a bridging loan then this varies from lender to lender and will range from several thousand pounds to several millions, depending on the borrower’s circumstances and the security they are offering for the loan.
Bridge funding can be secured quickly
One reason why these short-term loans are growing in popularity is that the bridge funding can be secured quickly and while lenders operate on a case by case basis, if there is an urgent need then a borrower could receive funds in less than 48 hours.
However, most potential borrowers should appreciate that it may take, on average, around two weeks for their bridge funding application to be processed by a lender.
Indeed, the lending criteria also makes short-term bridge loans more attractive than finance from a high street lender and they are proving popular with landlords looking to expand their portfolio, for instance.
Finally, the other important question that needs to be asked about those who use short-term funding is how much interest will the borrower pay; there’s no straight answer for this with interest rates ranging from 0.55% to 1.5% depending on the loan’s size.
Essentially, when it comes to short-term bridging loans then the experts at The Bridge Crowd will be able to help with any questions about them