More often than not, the very best investment opportunities are never around for long, they come and go at lightning speed, placing investors in a problematic situation.
If you have the on-hand capital needed to take advantage of these opportunities, you are golden, but the reality for most investors is not quite so ideal. Instead, you most likely have most of your wealth tied up in property, stocks, and general business ventures.
Consequently, significant on-hand cash reserves are not normally available. Worse still, most conventional lending streams are entirely unsuitable in time-critical situations.
The more money you need, the more difficult and time-consuming it is to get hold of; you may be able to qualify for as much as you need from a conventional lender, but waiting weeks or months for the transaction to be approved makes the whole process redundant.
Fast and Flexible Funding
Bridging finance is different in that it is designed specifically to solve this problem. Using property or other assets as collateral, capital can be borrowed at a competitive rate of interest over the short term.
Importantly, there are no restrictions on how much is available by way of a bridging loan. Whether you need six figures to cover an urgent expense or eight figures for a major property investment, bridging loan specialists are happy to oblige.
But what matters most with bridging finance is the speed at which the money can be accessed. The funds can be transferred within just a few working days, never more than a couple of weeks at the most.
What Applications Are Bridging Loans Useful For?
The advantage of a bridging loan lies in the fact that the funds can be used for any legal purpose. However, there are several common applications for bridging loans, which account for most transactions.
For example, fast-access bridging finance is routinely used to buy homes, commercial properties and land at prices lower than their true market value. Properties and land sold at auction in particular are popular among new and established investors.
Purchasing rundown properties to be renovated and sold at a profit is another common application, as is buying and improving a buy-to-let property, to be subsequently let out to generate ongoing income.
High net worth individuals now routinely turn to bridging finance to cover a wide variety of lavish purchases. If a supercar, yacht or jet comes up for sale at a bargain price, a bridging loan can help secure the purchase before a rival bidder beats you to the punch.
In all instances, bridging loans are designed to be repaid within a matter of months as a strictly short-term solution for ‘bridging’ financial gaps.
Who Are Bridging Loans Suitable For?
The flexibility and affordability of bridging finance holds universal appeal. However, not everyone is considered a suitable candidate for this type of short-term finance.
What matters most when applying for bridging finance is having a rock-solid exit strategy, your lender will expect to see evidence of exactly how and when you will repay the loan with all possible contingencies having been taken into account.
Interest on a bridging loan can be as low as 0.5% per month, highly competitive over the short term. However, under no circumstances should bridging finance be sought as a longer-term funding option.
For those who fit the criteria as eligible candidates for bridging finance, key features and advantages include:
- No upper limits on how much you can borrow
- Poor credit or a history of bankruptcy is not always an issue
- Loans available for applicants with complex or low income
- The ability to finance a diverse range of assets
- Can be taken out to purchase un-mortgageable properties
- Fast access to funds within a few working days
- No restrictions on how the money can be spent
- Ideal for asset-rich investors with limited on-hand capital
Bridging finance can be the ultimate fast-access financial tool for investors making snap decisions. Where a conventional loan or mortgage application is out of the question, a bridging loan could be just the thing.
Getting a Good Deal on a Bridging Loan
Ensuring you get the best possible deal on your bridging loans rests on two things:
- Targeting the right providers with your application
- Presenting the strongest possible case with all necessary evidence
At UK Property Finance, we can provide the expert advice and support you need to get an unbeatable deal from a reputable provider.
Our experienced team will guide you through the options available and help you choose the appropriate product to suit your requirements and objectives.
For more information on any of the above or to get your application underway, call UK Property Finance anytime for an obligation-free consultation.