Are you currently in the process of purchasing property or land but are having issues with cash-flow? Bridging finance could be a viable solution to help you get back on track.
A bridging loan, or bridging finance, is a type of alternative lending – a financial agreement that is specifically designed for short-term funding when cash is unavailable.
Bridging loans are a practical option for asset-rich borrowers without readily available cash-flow, a bridging loan makes it possible to borrow capital quickly as it is not income based. It is backed by security on another property (or land) by way of a first or second charge, in the same way as a mortgage.
Often, the property used for security is the one being sold or bought. However, bridging finance solutions can sometimes be secured against a different property within a portfolio, for example a buy to let property or holiday home.
A good example of a client in need of a bridging loan is a new property developer requiring financial help when they have not yet received the funds from their previous sale. Bridging loans can, quite literally, bridge the financial gap between the properties before cash-flow resumes.
Capital made available through bridging finance is often flexible and accessible quickly. However, there are some considerations which you should be aware of.
Bridging loans are often determined by your ‘exit strategy’ or the way in which you intend to pay back the loan. If you have secured the loan against another property, you may risk losing it if you are unable to repay the loan within the agreed contract term.
Another risk for borrowers is if they have secured a bridging loan but are unable to complete the sale because their chain breaks down. In this situation, the client may risk having their property repossessed by the lender.
However, contacting an experienced specialist bridging finance broker may help you weigh up the most suitable options for your situation. While a bridging loan may have a high-interest rate, our team of qualified commercial mortgage and bridging finance brokers will work hard to find the most suitable solution for your circumstance.
Keen to see bridging finance in action? Take a look at how we helped secure a bridging loan for our client with a personal need.
Our friendly team of expert brokers are on hand to answer any questions you may have about bridging loans and finance. Call us on 020 7220 5100 or contact us online today.
With a standard loan, the interest rate may be lower but they do not offer the flexibility and speed of a bridging loan.
Typically, bridging finance solutions are a short-term loan with a higher interest rate. This is because large funds can be made available quickly to borrowers. The loan can be repaid immediately or up to 24 months later, and often have no fees for exiting your agreed term early so long as the loan has been fully repaid.
Depending on your financial situation, there are different types of bridging finance solutions available. The main two being a regulated bridge and a non-regulated bridge loan.
At Coreco Commercial we’ve been approached by a number of clients who are looking for bridging finance solutions. They include:
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
A percentage of the mortgage amount may be charged depending on individual circumstances. A typical fee is 1%.
Coreco Commercial is a trading style of Coreco Specialist Finance. Coreco Specialist Finance. Registered Office: 117-119 Houndsditch, London EC3A 7BT. Registered in England Number: 06851546
Coreco Specialist Finance Limited is authorised and regulated by the Financial Conduct Authority.
Some types of finance offered by Coreco Commercial are not regulated. Please contact us for more details.
Coreco Commercial advisers are experienced mortgage advisers but we are not tax advisers. Please seek independent tax advice if required before you decide to proceed.
We know that all our clients are unique, and therefore the finance you require needs a different approach. We pride ourselves on providing a client focussed journey built around your needs and goals.
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