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The 6 Main Benefits of Bridging Loans

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1. Bridging loans can be arranged quickly

This one is well documented, but bridging loans can be arranged rapidly, which can come in very handy.

Life throws up unexpected surprises for everyone and sometimes it can catch you out. When you need to raise money for a property quickly, a mortgage or similar longterm loan may not be the best solution. If you have a property available as security, there is a good chance that a bridging finance lender will have what you’re looking for.

2. Bridging loans can allow you to profit from property

Most articles about bridging finance tend to focus on avoiding problems, but there can be a real upside to them.

Taking out a bridging loan through a reputable lender can be very profitable if used to fund the right transaction. When buying a property below market value or refurbishing/altering a property there are often large profits to be made.

Raising finance in this situation via a bridging finance lender can allow you to take on projects that would otherwise, be out of reach or unmortgageable. If you’re unsure about whether this applies to you, our team of specialist brokers is on hand to discuss this further.

3. There are often no monthly repayments with bridging finance

When things are tight, or a new project is being taken on, more outgoings are the last thing you need.

Unlike mortgages, bridging loans are fairly unique in borrowing terms as there are often no monthly payments to make. Instead, you repay the interest at the same time as the loan.

This makes bridging loan repayments far easier to manage than other, similar types of debt.

4. Bridging loans are very flexible

Bridge loan lenders often come across strange or difficult transactions but are often able to make them work, with interest rates to suit your circumstances.

Mortgages and unsecured finance often work to very strict criteria and are often underwritten predominantly using computerised scoring.

This is a far cry from taking out a bridging loan, which is usually underwritten manually by a person. This allows an expert to problem-solve and make common-sense lending decisions.

5. Bridging finance can make your life easier

Bridging loans are a flexible form of lending and they can be arranged both quickly and with minimal hassle. When you need to raise funds to cover a pressing financial matter quickly, then a bridging loan could be ideal.

When choosing a bridging loan for an urgent short-term borrowing need, you will find the process of selecting the right lender far simpler than you would should you choose a mortgage, especially with help from an accredited broker.

6. Bridging loans can prevent financial loss

Bridging loans can be used to prevent financial loss in a number of circumstances. For example, when looking to pay an urgent bill, such as a tax bill which if left unpaid could result in adverse credit being registered against our credit file.

Any adverse credit added to your credit file could result in a higher cost of borrowing, or even an inability to borrow in the future.

Bridging finance is often used to repay a lender prior to repossession. Again, in this situation, it could work out better to pay the costs of a bridging loan to allow you to avoid repossession and sell the property yourself, potentially at a better price than your lender could achieve.