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Bridging
loans are short term loans secured against property.
The advantages of bridging loans are that:
| £ |
they
are quick to put in place; |
| £ |
the
payments are on an interest only basis; and |
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they
are based on a property’s valuation (rather
than its purchase price). |
There are a variety of loans available of up to 12
month terms, some of which allow for interest (which
typically
runs at from 1% per month) to be ‘rolled up’ to
be paid later.
These
features and flexibility mean that commercial bridging
loans are used to:
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raise
cash quickly for cashflow purposes; |
| £ |
buy
land and property; or |
| £ |
fund
property development. |
Our
list of case studies includes some examples of
bridging loans being used to fund property
purchases and development.
However bridging loans are expensive forms of
finance, often with severe penalties for
defaults, so you
need to:
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ensure
you obtain both the best rate available and
the terms most suited to your needs from a
reputable lender; and |
| £ |
that
you have thought about how the loan is to be
repaid, whether by selling the property or
arranging ‘take out’ finance, before
you borrow. |
You
can download our client Briefing No 4 on Commercial
Property Bridging from
our
Free Financing
Information
page.
For free advice on the best bridging loan
for your purposes please complete our
no obligation
enquiry
form below.
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