Bridging Finance Specialists: Everything You Need to Know

  • Bridging Finance
bridging-finance

The coronavirus pandemic has placed pressures on the finance industry; however bridging finance has remained relatively robust. In fact, MMA has recently found a growing demand for bridging finance. This is because there will always be a need for short-term liquidity, especially during a financial hardship, and so bridging finance remains an option to consider.

 

What is bridging finance?

A viable finance option that has been around for over 50 years, the bridging market has evolved into a vibrant, competitive and growing sector within the finance industry.

The term “bridging finance” suggests that this is a type of finance that is only available to customers who want to purchase a new property before they have sold their previous one. Although this is a valid purpose for bridging, it offers much more than that. A versatile solution, bridging loans can be used for a variety of complex challenges including auctions, property development and renovation projects and for landlords who wish to buy a property and rent it out.

Bridging also now enables borrowers to access capital for a range of purposes and life events, however the loan will always be secured against the borrower’s asset, and typically this will be property. Although a majority of bridging loans are unregulated, there are also times when a transaction will be regulated by the Financial Conduct Authority (FCA), bridging is a vital market worth around £4 billion in the United Kingdom.

 

Is bridging finance expensive?

Many people often believe that bridging finance is an expensive form of finance, and therefore is not a practical option for their needs. This is not necessarily true, with the market becoming increasingly competitive.

Like any loan, it is important to consider how much the overall cost will be, how long you intend to take to pay the loan back and what it will be used for. Unlike a conventional commercial mortgage, you are not signing up for a 25-year term as regulated bridging loans are for up to 12 months and often payments are retained. However, bridging loans can be acquired relatively quickly, until a permanent solution is found. This means its short-term purpose can be used to maximise profit and potentially save you money with a small expense on a larger scale. These are important considerations when it comes to the cost of bridging finance.

 

Finance 4 Business

As bridging finance specialists, we understand the importance of fully understanding your unique needs when evaluating how bridging finance can help. If bridging finance is the right option for you, we will source the market to find you the best deal from our lender panel.

Our experience, knowledge and service provide us with the right skills to supply expert advice and offer a range of bridging products to enable you to move forward. Please call one of our dedicated advisers on 0121 309 0444 to find out more.