Bridging loans are a short-term finance option that are used to fund the purchase of a property, when it wouldn’t otherwise be possible. If you want to buy a new property but can’t sell old property quickly enough, or if you need to pay for repairs before a lender is willing to release mortgage funds, then a bridging loan may be the only way that you can finance the purchase without the danger of losing the property.
Not all property purchases complete without a hitch. In fact, if you can complete on the purchase of a business property without encountering at least one major obstacle or hurdle, you are likely to be in a very small minority.
At A2B Finance we understand the difficulties that businesses face when purchasing a new property. We also know that different acquisitions have different requirements. We can work with you to determine your requirements, the requirements of your purchase, and your circumstances. We will determine whether a bridging loan is your best option, or whether there is a more suitable alternative to this style of financing. Call us today to speak to a business finance specialist and we will help you determine the best way to progress.
The most common use of a bridging loan is to finance the purchase of a property when you need to buy quickly, but are unable to sell an existing property in time to fund the purchase. If you delay too long, waiting for the sale of your existing property, you face the very real possibility of losing out on the property.
Because a bridging loan is a short-term finance option, it means that terms will usually only last for a matter of weeks or months. The loan company will take your first repayment, or a portion of that repayment as the cost of providing the finance, and they will look to exit as soon as the loan comes to term.
Another possible use of a bridging loan is to fund an auction property purchase. Most auction houses require the payment of a deposit as soon as the hammer goes down. It isn’t possible to arrange a mortgage before having a survey, and mortgage lenders are extremely reluctant to lend money for an auction purchase.
A bridging loan can provide you with the funds you need to pay the deposit, before arranging and finalising on a mortgage.
Mortgage companies also won’t lend if there are structural and major problems with the property. If you need to make repairs before the mortgage company will lend you the money that you need, then a bridging loan can provide you with the short term funding that you need to make the repairs. Once repairs are made and the lender agrees to the mortgage, your bridging loan will come to term.
Bridging loans serve a very specific purpose. They bridge the gap between needing funds for a property purchase and receiving long-term funds. Call A2B Finance today and speak to one of our advisors to discuss the best funding options that are available to you. We can help complete the purchase of your next property, even if you have hit challenging obstacles along the way.