Choosing the right commercial bridge loan lender: Questions and Answers
Bridge loans are short-term financing solutions that, as their name suggests, bridge the gap between a short-term financing solution and a long-term financing solution. A bridge loan is usually used for property purchases that are time-sensitive and require the sale of an existing property to fund the purchase of a new one. By taking out a bridge loan, the borrower could secure the funds temporarily against the capital of the existing property, allowing them to finish the new sale and await a buyer for the existing property. In addition, the borrower could hold off on the sale until a reasonable offer was received rather than lowering their asking price or accepting below-market offers.
Due to the recent economic crisis, banks and other mortgage lenders are still extremely cautious about lending out money. This has caused;
The cost and timing of checking have increased
Since banks have to perform more checks and due diligence, the approval process for a long-term loan or mortgage can take weeks or months.
Increased refusal rates
Due to the current economic crisis, banks are less likely to lend in general. With refusal rates at their highest ever, it is becoming harder and harder to obtain a bank loan or mortgage.
Interest rates increased
Banks now realize that people are finding it harder to obtain commercial mortgages in general, so supply and demand have shown that interest rates are increasing as well.
Using a bridge loan will not only provide you with the time to consider the above, and to find the best mortgage rate and deal for you, but it will also allow you to generate funds quickly and easily. As with a bridge loan;
- The borrower does not have to have a good credit history
- The borrower does not have to undergo rigorous credit checks
- The borrower does not have to worry about regular monthly payments since the bridge loan is paid off at the end of its term
A bridge loan typically has a repayment term of 6-12 months, after which the loan would be repaid, including all interest and fees.
The Uses of Bridge Loans
In recent years, bridge loans and bridging finance have become more widely used in any business context. Businesses might use bridge loans to;
- Pay a large tax bill
- Start a new project
- Adding more funds to an existing project
- Paying invoices to suppliers
- Making payments to subcontractors
Nevertheless, commercial bridge loans remain a valuable option for property developers and entrepreneurs who wish to expand their business and who wish to buy a property at auction, or a buy-to-let that is located in a desirable area.
Listed below are a few questions that can be helpful when searching for a commercial bridge loan lender in the UK:
What are the best ways to find the best commercial bridge lender in the UK?
Find the right commercial bridge loan lender when you need an instant finance solution, as you will be relying on this bridge loan lender for the entire loan term. Here at Bridge Direct, we have over 30 years of bridging and financial lending experience.
What is the best way to find bridge loans?
It is important to check whether the bridge loan lender offers residential and commercial loans. Some bridge loan lenders offer funding for specific types of projects or areas that are familiar to them. As each deal is assessed on its own individual merits, Bridge Direct can provide an instant decision on any type of bridge loan for any commercial requirement.
What is the process for applying for a commercial bridge loan?
Bridge loan applications are usually easy and quick to complete. It can become more complex if you use a broker, as they will need more information to provide to various bridge lenders they represent, since they effectively cover all criteria. With Bridge Direct, you won’t have to worry about this. At Bridge Direct, you will speak with a lender, not a broker, which means you will get a decision on your application immediately.
What is the best commercial bridge lender for a property loan?
If you are looking for the best bridge loan lender for commercial properties, you should contact Bridge Direct. The team at Bridge Direct has over 30 years of lending experience, and we are direct lenders, not brokers, so you can get a bridge loan decision instantly.
Do I qualify for a commercial bridge loan?
Find a lender who specializes in the type of bridge loan you’re looking for. The majority of bridge loan lenders will give you a decision on your request immediately or at least on the same day. Regardless of your credit status, we accept 1st and 2nd charges with no credit checks, even if you have bad or adverse credit.
Bridge Direct can be reached directly at 020 3126 4969 or www.bridge-direct.com