How Fast Can I Get Bridging Finance?
Every so often, a report will come out of a bridging finance application completing in 24 hours. The reality is that this is very rare. A realistic timescale for a bridging loan is 5-10 days, with 7-14 being far more common.
Some of the cheapest lenders undertake a far more rigorous application process and can take 14-21 days to complete an application.
We can usually give you an indicative agreement in principle within 1 hour and credit backed finance terms within 4 hours.
What Can Delay A Bridging Finance Application?
Numerous factors affect the time taken to complete a bridging loan. Some lenders can complete applications far quicker than others.
There is often a conflict between securing a short-term bridging loan as quickly as possible and securing the lowest repayment rate. Like any other type of lending, bridging finance is priced according to the level of risk to the lender which will affect repayments and available interest rates.
For an application to complete in a matter of days, the lender would have to complete very few checks. For instance, thorough valuation reports can take some time to complete, which is at odds with the need to complete quickly. As such, some lenders will forego a survey report in certain circumstances.
The same can be said for legal searches, these can take a couple of weeks to come back. To get around this, some lenders will accept title insurance as a replacement.
These factors can shave a huge amount of time off the bridging finance application process, but this comes at a cost. They greatly increase the risk to the lender, as they reduce their understanding of their security property.
By increasing the risk to the lender, naturally, this will, therefore, increase how much you’ll need to repay. This is one of the main considerations for lending via a bridge loan.
How Can I Help Speed Up My Application?
Your lender and broker play a key role in ensuring your application is completed quickly, but there is only so much they can do. The approach taken by the borrower is equally important to ensure quick completion.
When a lender begins a full application after approving a new bridging loan in principle, they will let you know exactly what is needed to progress to a full offer. These will usually be documents such as confirmation of ID, confirmation of your exit strategy (how you intend to repay the loan), a property valuation report etc.
To progress matters quickly, all items requested must be sent back immediately, as any delays will directly prevent the progress of your application.
Another area that often slows down bridging finance applications is a poor choice of solicitor.
How Do I Find The Right Solicitor?
Bridging loans are a specialist product and the process of arranging one is quite different from that of arranging a mortgage. Your solicitor must also be experienced in arranging bridging finance.
There are several ways to prevent issues with your solicitor upfront. The key ones are:
- Directly ask your solicitor about their experience in dealing with bridging loans. Both the practice and the individual that you’re dealing with must both be highly experienced.
- Ask for examples for specific examples of when they have successfully arranged bridging loans previously.
- Be clear on how quickly you would like the application to complete. In this situation, people often say ‘as soon as possible’, but this is counterproductive. In reality, it is often disregarded. Be clear on the date that you’re aiming for, and if appropriate, any hard-borrowing deadlines that you’re working to that must be adhered to.
- Ask about your solicitor’s workload. It is often the case that the person acting can undertake the work but does not have the time needed to give the application the attention that it needs.