UK Bridging Loans – A Quick Guide

In this blog we will be further exploring Bridging Loans – and why they are a great option for businesses as well as Property Investors!

A quick recap…

Bridging Loan Definition:

A bridging loan is a short-term loan used when someone wants to make a purchase before receiving the funds from selling something else. This mostly involves buying and developing property but can also include things like tax payments.

Bridging Loan Interest Rates:

Bridging loans can range from £5,000 to £25m+ and lenders will generally allow up funds for up to 75% of the value of the property.

As a short-term loan, lenders tend to charge monthly rates over APR and are generally more expensive than other long-term loan options. You can expect to be paying from 0.5% up to 1.5% monthly. Although Bridging Loans are assumed to have high interest rates, this is not always the case – it depends on many factors such as loan-to-value ratio, loan duration, and credit score.

Why Should You Consider A Bridging Loan?

A bridging loan can be highly useful applied in the right circumstances and comes with many benefits, making them a fantastic option.  

Speed: The nature of the need for bridging loans usually means that loans can be processed and received extremely quickly, with some being under 72 hours. This assists in keeping any property transactions on track and meeting payment deadlines.

Larger Loans: As bridging loans are used predominantly for property investing/developing, the availability of large sums that businesses can utilise is also very useful. In addition, as there is a security placed against the loan, it is less risky for the lender therefore they are willing to lend more money.

Flexibility: There are many options for borrowers to repay the lender over different time frames. Some can pay the interest back monthly to the lender, while some allow a deferred/rolled up process where interest is not paid until the end of the agreement. This is beneficial as the borrower can adapt the loan plan to adjust to their needs and is easier to manage.

Bridging Loans Comparison

Although bridging loans offer many benefits including speed and flexibility, there are always other options to consider; traditional mortgages, personal loans, (un)secured loans, are all examples of other avenues to explore and find out which would be most suited to your company needs.

Contact The Best Finance Group

If you are interested in pursuing a bridging loan (or any other form of business finance) and want to find out more information, our dedicated and experienced team are here to guide you in getting the best bridging loan deals. Get in touch for an informal chat with any questions or queries! We look forward to hearing from you.

If you would like an instant quote for Bridging Finance, why not use our free Bridging Loan Comparison Tool? You can immediately see live rates from over 100 UK Bridging Loan Lenders and receive a Decision In Priciple within minutes!

Click Below:

https://propertyfundingplatform.com/TheBestBridgingLoans#!/allloans

If you would like to watch one of our videos about Bridging Finance, please see the short explainer video below: