Here at Newable Finance, we have a comprehensive range of financial services designed to cater to the diverse needs of businesses, one of which being bridging loans.
What is bridging loan?
A bridging loan is a short-term financial arrangement that allows individuals and businesses to secure funds against a property. It serves as a temporary solution, typically used when there is a gap between the sale of one property and the purchase of another.
These loans can be secured in many different ways. For example:
- First Charge: In this scenario, the bridging loan takes precedence as the primary charge against an unencumbered property(one without an existing mortgage or other loans).
- Second Charge: Alternatively, a bridging loan can be secured as a secondary chargebehind an existing mortgage on a property. This means that the existing mortgage lender has the first claim, and the bridging loan provider follows as the second charge.
- Against multiple different properties to increase leverage. This can also use a mixture of first and second charges.
- In some cases the loan can even be secured over a property owned by another person or entity.
Who can get a bridging loan?
Bridging loans serve a variety of purposes and can be utilised by different groups of people in various situations.
- First-Time Buyers: If you’re purchasing your first property, a bridging loan can help you secure it while waiting for other funds to become available.
- Experienced Portfolio Landlords: Seasoned landlords with existing property portfolios can use bridging loans to expand their investments or manage property transactions.
- Limited Companies or LLPs
- Property Owners: Whether you’re buying a new property or already own one, bridging loans can assist in various scenarios. For example, if you need to complete a purchase before selling your current home, a bridging loan can bridge the gap. Bridging loans can also be used when a sale falls through as they can help maintain momentum in property chains. Bridging loans can also be used for auction purchases, investing in Buy-to-Let properties and for renovation projects.
How much can I borrow?
At Newable Finance, we specialise in providing flexible and efficient bridging loans to help you secure your next property deal. Whether you’re looking to purchase a residential property, refurbish an existing one, or acquire land, we’ve got you covered. Below are the key features of our bridging loans.
- Loan Amount: Starting from £50k
- Loan-to-Value (LTV): Up to 80% of the property’s value (and even up to 100% with additional security for under-valued properties).
- Quick Process: Our streamlined process ensures prompt bridging loans.
- Exclusive Rates: We maintain strong relationships with lenders, securing exclusive rates for our clients.
- Loan Terms: Extend up to 36 months, allowing you to tailor the repayment period to your unique circumstances.
Can I apply for bridging loan if I have bad credit?
If you’re seeking a bridging loan but have concerns about your credit history, there are still options available. Our lenders understand that credit backgrounds can vary, and they consider applicants with diverse credit profiles. Here’s how you can apply for a bridging loan even if you have bad credit:
- Self-Assessment: Begin by running credit checks on yourself. Understand the reasons behind your poor credit score. This awareness will help you address any specific issues and present a stronger case to lenders.
- Organise Documentation: A solid exit strategy is crucial. Organise your financial documents, including evidence of how you plan to repay the loan. Lenders appreciate well-prepared applicants who can demonstrate their ability to meet repayment obligations.
- Property Listing: If your property is already on the market, it significantly improves your chances of securing a bridging loan. Lenders prefer properties that are actively being sold, as it provides assurance of repayment.
Remember, while bad credit may pose challenges, working with an experienced broker can make the process smoother. They’ll guide you through the steps and help you find the most suitable lender for your situation.
What are the benefits of a bridging loan?
Bridging loans offer several advantages, making them a valuable financial tool for specific situations.
- Fast Completions: Bridging loans are known for their speed. They offer a quick solution when time is of the essence, such as during property transactions or urgent business needs. Unlike traditional mortgages, which can take weeks or months to process, bridging loans can be arranged within days.
- No Monthly Payments: One of the key advantages of bridging loans is that they don’t require monthly payments during the loan term. This can be crucial for individuals or businesses who need to maintain their cash flow while waiting for a property sale or other financial events.
- High Loan-to-Value (LTV) Borrowing for Refurbishment: Bridging loans allow borrowers to access a higher percentage of the property’s value (up to 85% LTV) compared to standard mortgages. This makes them ideal for financing property refurbishments, renovations, or improvements.
- Flexible Funding Options: Bridging lenders often provide additional funds beyond the purchase price. They can cover some of the purchase costs (such as legal fees or stamp duty) and allocate funds specifically for refurbishment works. This flexibility allows borrowers to address various financial needs related to the property transaction.
- Versatility for Business and Overseas Purchases: Bridging loans are not restricted to residential properties. They can be used for commercial purposes, including business expansion, investment, or bridging gaps in cash flow. Additionally, bridging loans can facilitate overseas property purchases, making them suitable for international buyers.
- Un-mortgageable Property Purchases: Some properties may not qualify for traditional mortgages due to their condition, location, or other factors. Bridging loans can bridge the gap for such un-mortgageable properties, allowing buyers to secure the property quickly and address any issues later.
Our team is well-versed in the intricacies of bridging finance and is eager to assist. Whether you’re navigating a property purchase, business expansion, or temporary cash flow needs, our advisors are here to guide you.
Give us a call today to discuss your specific case. We’re committed to arranging tailored funding solutions that meet your unique requirements. Let us help you bridge the gap and achieve your business goals!
About Newable
For over 4 decades, Newable has been supporting thousands of businesses every year through the provision of Money, Advice and Workspace. An employee-owned business with a commitment to creating positive impact in all that we do, our team are on hand to help your business today.
Find out more about how Newable can help you and your business.