About commercial Bridging Finance
What is commercial
Bridging Finance?
commercial bridging finance is a temporary loan taken out
usually to solve a cash shortfall when buying property. Usually
commercial bridging finance is used when somebody purchases
property before they sell their own, or need funds quickly
to purchase investment property or properties at auction and
do not have the time to put adequate funding in place.
commercial bridging finance present a greater risk to the
lender so the product is usually more expensive than normal
mortgages or loans. Because of this, bridging finance should
only be considered as a viable option if you are likely to
be able to pay it back within six months.
For the purchase of property, bridging finance is normally
secured by getting a mortgage on the new property, and taking
out a second mortgage on the property to be sold. This would
be dependant on a positive valuation of the relevant properties.
Bridging finance can be arranged for 100% of the property
purchase price so long as the value is covered by up to 80%
of the value of the property the loan is secured on, less
any existing mortgage.
Bridging finance can be arranged from £27,000 up to
£1,000 for quick deposit. Larger loans are possible
but may take slightly longer to arrange.
Money from bridging finance can be made available at very
short notice, sometimes as quickly as 24 hours, but normally
takes between 7 and 10 days depending on the complexity of
the application and the parties involved
What can they
be used for?
Commercial bridging finance can be used for any purpose.
The most common uses for bridging finance are:
- To enable the purchase of one property before the completion
on the sale of another.
- The purchase of investment property
- Buying properties at auction
- The purchase of buy-to-let property
- Corporate re-location.
- Tax or VAT payments.
- The purchase of land
- Temporary cashflow shortfalls
- Business finance
Who can
arrange bridging finance?
Any UK resident over 18 owning property or suitable security
can arrange bridging finance. Bridging finance can be arranged
for people with CCJ's, adverse credit, self employed and anyone
else that traditionally have found it harder to get a loan
or mortgage.
How does commercial
bridging finance work?
Depending on the nature of the loan, the bridging finance
value and the securities held, the application process can
differ. For most commercial bridging finance, the following
process usually applies;
Once your Application
has been received and approved, you will be contacted with
an offer in principle. If you agree to the offer, the lender
will arrange for an urgent valuation of the property the loan
is to be secured against.
Once payment has been received for this valuation it will
take a maximum of 72 hours, although this stage usually only
takes a day.
In the meantime, a solicitor or conveyancer is required to
make quick checks on all the usual conveyancing tasks ie the
local authority search, checking the deeds of the new property
etc.
Once these tasks are complete, the money is deposited in
your bank via electronic transfer.
What does commercial
bridging finance cost?
You will be charged a set interest rate, which is usually
referred to in terms of a percentage per month. This can be
as little as 0.75% depending on the amount of the loan and
your status.
At this rate, if you borrow £100,000 at 0.75% per month,
the loan will cost you £750 per month.
Being a principal lender, we can offer you access to bridging
finance at the lowest rates, quickly and best of all there's
no middle man.
Apply Now
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