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Commercial bridge loans are a short-term finance solution, which as the name suggests, are used to ‘bridge the gap’ before a more secure, longer-term means of finance can be finalized. These types of bridge loans were used in property purchases that were time critical and involved a chain, meaning that an existing property needed to be sold to fund the acquisition of the new one. By taking out a bridging loan, the borrower could secure the funds temporarily against the capital held in the existing property allowing them to complete the new sale and await a buyer for the existing property. This also meant that the borrower could hold off on the sale until reasonable off came in, as opposed to having to lower their asking price or accept below market offers.
As we are still in the wake of the recent economic crisis, banks, and other mortgage lenders are still extremely wary about lending their money out. This has had the knock-on effect of causing;
Increased checking costs and timings
Due to some checks and due diligence banks now have to undertake, the approval process for a long-term loan or mortgage can be weeks or even months. We banks are having different set criteria for their products as well you could end up having to make multiple applications across many different banks as well.
Increased refusal rates
Again, due to the recent economic crisis, banks are less likely to lend in general, with refusal rates being at their highest ever, it is becoming harder and harder to secure a bank loan or mortgage.
Increased interest rates
With banks now being aware people are finding it harder to secure mortgages in general, supply and demand have shown that interest rates are increasing as well.
By using a bridge loan, not only does it give you the time to consider the above, and find the best possible mortgage rates and deals available to you, funds can be generated quickly and easily. As with a bridge loan;
- The borrower does not need to wait for approval
- The borrower does not necessarily need to have a good credit history
- The borrower does not need to run through vigorous credit checks and due diligence
- The borrower does not need to worry about regular monthly repayments all the bridge loan is settled completely at the end of the term of the loan
Bridge loans usually have a repayment term of 6-12 months, after which the loan would be drawn down and settled, including all interest and accrued fees.
Bridge Loans Uses
More recently the use of bridge loans and bridging finance, in general, has become more widely used for any business application. Many businesses now may take out a bridge loan for;
- Paying large tax bills.
- Kick starting a new project.
- Adding additional funds to an existing project.
- Paying suppliers invoices.
- Paying subcontractor services.
However, commercial bridge loans are still a valuable option for property developers and entrepreneurs who want to take their business to the next level and are looking to snap up a property at auction, or a buy-to-let that is in a desirable area.
Below are just a few frequently asked questions which can be helpful at the finding the right commercial bridge loan lender in the UK:
How can we find the best commercial bridge lender in the UK for us?
When you are looking for an instant finance solution, then finding the right commercial bridge loan lender is extremely important decision, as you will be relying on this bridge loan lender through the entirety of the loan. Before approaching any lender in the UK, it is important to assess and find out their lending experience, because as with most things in life, an experienced person will generally be able to give better advice. The team here at Bridge Direct has over 30 years of lending experience in bridging and the financial industry, meaning there is little they have not seen before.
The best way to find bridge loans?
Check if the bridge loan lender is offering loans to suit your residential and commercial requirements. Some bridge loan lenders will offer funding to a particular type of project or areas they are familiar with. However, Bridge Direct will offer an instant decision on any type of bridge loan for any commercial requirements, as each deal is assessed on its own individual merit.
How can I apply for commercial bridge loan?
The application forms for bridge loans are usually quick and simple to complete. If you are using a broker, it can become a little more involved as they will need more information to provide to the various bridge loan lenders they represent, as they are effectively covering all criteria. With a bridge loan from Bridge Direct you don’t need to worry about this. The team at Bridge Direct are lenders, and not brokers, meaning you will be speaking with the decision maker who will give you an instant decision on your application.
Which is the best commercial bridge lender for a property loan?
Finding the best commercial bridge loan lender is not an easy task. However, look no further, you can contact Bridge Direct for any type of property bridge loans. Why?, because the team at Bridge Direct has over 30 years of lending experience, and are direct lenders, not brokers, who will give an instant decision on any bridge loan application.
How do I know whether I am eligible for commercial bridge loan or not?
Find a lender who is an expert or can specialize in the type of bridge loan you are searching for. If possible, meet them personally and discuss you requirements thoroughly. Most bridge loan lenders will give an instant decision on your request or at least on the same day. When you approach Bridge Direct for you bridge loan requirements, they will assess your situation thoroughly and offer you the best possible deal for you. Every deal is assessed on its own merits, 1st and 2nd charges are accepted with no credit checks, even if you have bad or adverse credit.
You can contact Bridge Direct by calling them directly on 020 3126 4969 or complete the easy to use bridge loan application form here.