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Bridging Finance and Bridge Loans
Bridging finance, or a bridging loan as it is commonly referred to is a property secured finance loan. Often used to allow the purchase of a new property when the existing property is not yet sold, and secured against the existing property, bridging loans are usually 6 – 18 months duration. Bridging loans are normally interest only repayments as the full amount is repayable when the secured property is sold, hence the “bridge”.
Bridging loans are traditionally a little more expensive than normal secured loans due to the short period that they are required and are often quoted at a monthly percentage rate. Care needs to be taken here in order to assess the actual APR. which is where CBS Finance can help.
Bridging finance is popular with property developers or for businesses looking to buy property at auction when cleared funds need to be immediately available.
CBS Finance have significant experience in helping people with bridging loans and are able to find the best deal available to suit your finances and circumstances. We offer friendly impartial advice to assist you with your search for a bridging loan.
Are Bridging Loans For Property Purchases Only?
Bridging finance can be used in other areas other than just for bridging a short term gap between selling and buying a property. These types of loan can be more expensive than traditional finance but if you need funds to cover short term debt and a loan can be secured on a property then a bridging loan may be the answer. However there can be hidden fees involved. Admin and set up fees, exit fees as well as a higher percentage rate of interest. Your exit strategy from the loan also needs consideration. Contact CBS Finance for help and guidance here.
How Long Does it Take To Get a Bridging Loan?
The process of actually applying for a bridging loan is relatively fast and straightforward. How much you want to borrow, the duration of your bridging finance and affordability all need to be assessed but this is a quick process. Acceptance of the loan itself can be as fast as 24 hours although sometimes it takes a little longer. The financial status of your business will then need to be checked as with any loan, along with the current market value of the property being offered as security against the loan.
A property valuation will then need to be carried out.. In many cases a bridging loan can be available within 2 weeks or less.
CBS Finance have helped many people successfully apply for bridging finance. We can save time and money so get in touch to find out how we can help.
Glossary of Terms
Q. What is bridging finance?
A. Bridging finance is a short term loan – often at a higher interest that allows people to complete a property purchase when they have not yet sold their own property. A short term bridge effectively that allows them to continue with their purchase.
Q. Is bridging finance the same as a bridging loan?
A. Bridging loans and bridging finance refer to the same financial products.
Q. How long does it take to get a bridging loan?
A. Applying for and being approved for a bridging loan is a relatively fast process and can often be completed within 72 hours.
Q. How do I qualify for a bridging loan?
A. To qualify for a bridging loan you will need to currently own a property with a minimum of 20% equity available.
Q. How much can I borrow with a bridging loan?
A. Lenders will usually start at around the £5,000 minimum bridging loan stretching to over £50 million in some circumstances.
Q. Are bridging loans expensive?
A. Typically bridging finance is more expensive that loans or mortgages. This is mainly because they are much shorter term loans that incorporate the same checks and procedures as longer term loans.
Q. What is the typical period for a bridging loan?
A. Bridging loans are typically granted on a short term basis to cover emergency finance requirements. Often between a week and 12 months but everyone’s circumstances are different and can be considered.
Q. Do I need a good credit score to get a bridging loan?
A. Most lenders will only consider bridging loans to people that have a good credit rating however there are a number of specialist lenders that may be able to help in certain circumstances.