To summarize, bridging loans are typically used as a quick funding option to buy a property, or finish a development, before an individual can get access to their own funds. This would usually be the sale of an existing owned property. However, the service of bridging finance has increased in popularity and is usable for other purposes. It helps to picture the loan as to ‘bridge’ a gap between a debt coming due and credit becoming available.
Here’s one instance of how it can work:
- You find a dream home you would love to buy.
- You’re selling your current home to fund buying the new one.
- The sale is delayed, and you’re worried someone else might come and buy the dream property.
- To prevent this, you can take out a bridging loan (secured against the current home) and use it as a down payment on the dream place.
- A few months later your old home is sold and is used to pay off the bridging loan.
REGULAR QUERIES REGARDING BRIDGING LOANS:
What can bridging loans be used for?
Some examples include the following:
- When in need to cover unexpected business expenses
- developing a new start-up business from scratch
- buying a property from auction
- buying a property that’s currently un-mortgageable
- to help pay a tax bill
Am I eligible for bridging loans?
This is dependent on your personal circumstances and what intention and security you have in place for the loan. If you would like, we would be more than happy to listen to your situation and guide you through the best funding options available.
What is the term length for bridging loans?
They are used as a short-term loan option in most circumstances and so the typical length would be 12-months or less. For non-regulated loans the term of the loan can be longer.
If you would like to gain some insight on costs that can occur through bridging finance, then please feel free to use our bridging loans calculator. Please note the loan calculator can only provide estimated costs. If you would like to get the ball rolling and/or would like any further advice with no obligation, give us a call or fill in the loan inquiry box.
Complete bridging loan criteria:
To view our complete criteria please view on our other page Bridging Finance Criteria
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Your Commercial Finance is a trading style of Your Mortgage Broker (Cardiff) Ltd which is directly authorised and regulated by the Financial Conduct Authority (FCA).
Our FCA registration number is 765678. You can find us on the FCA register at https://register.fca.org.uk/.
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