Bridge loans fulfil a number of roles, generally involving property. They are often used to purchase a new property whilst an existing property is on the market waiting to be sold. They can also be used to purchase a house at auction for renovations, which could be sold for a profit soon after.
Bridge loans are short-term loans, which normally range between 6 and 12 months in duration, and often have a high rate of interest, of approximately 1.5% a month.
The loan is typically secured against an existing property or land, which means that if you fail to keep up with the repayments, the property secured against the loan will be repossessed.
The general market for a bridge loan tends to be populated by property developers and property auction goers. However, they could also be used by companies needing to raise capital, for example, to fulfil a large product order, or to pay bills in anticipation of future profits.
The main benefit of bridge loans is for cashflow, i.e. not miss out on a good opportunity, whether it is a good priced property or a business deal.
Bridge loans can often be taken out at a faster rate than a traditional mortgage so the opportunity is not missed, however this doesn’t mean that they should be used as an alternative to a mortgage or other mainstream lending solutions.
Once we have qualified your enquiry and requirements, we will refer you to a master broker to place the loan, if this is the most suitable options for you. We will happily act as the main point of contact throughout the process and will problem solve, as required.
For more information, please get in touch.