A Beginners Guide to Bridging Finance

Bridging loans are increasingly growing in popularity due to the demand from potential investors looking for the most suitable option for their budding, time sensitive investment opportunities.

FTO Bridging Loans are here to help you if you are new to the bridging loan market. Entering into unknown territories can be overwhelming and also dangerous if you agree to terms that could leave you in debt that that you are not able to pay back in time. This could leave you in a difficult if not impossible situation. Luckily, we’re here to guide you, so you can feel safe in the knowledge that you are entering into the world of bridging loans safely.

What Is A Bridging Loan?

Bridging Loans are viewed as short term loans that are spread over 12 months or less. Some may believe that Bridging Loans are for the commercially minded however, one of the most popular uses for bridging loans is to buy a new home whilst the current one sells leveraging the collateral, so a quick move can be made with ease.

Of course, there are many uses for commercial property investors and there are many applications. Bridging Loans are increasingly popular as banks refuse to give loans more and more. On a financial basis this makes no sense as creating opportunities means a healthier economy.

There are 2 main types of Bridging Loans:

  • Closed Bridge Loans: This is where there is a set date for the loan repayment. The usual circumstances for this would mean the intended borrower has already set in place a buyer and date for selling property. Once the property has been sold the loan repayment will be recovered from the sale amount.
  • Open Bridge Loans: Even though there is a repayment cut of date there is no definite date I place from the borrower in the first instance when the loan must be repaid.

So When Should Someone Consider a Bridging Loan?

 

You should consider a bridging loan in the following circumstances:

Quickly securing a property

Repairing a broken property chain

Building a house

Downsizing

Converting a barn (or other property)

Auction Finance

Temporary Cash Flow Cover

Raising capital

Tax liabilities

Meet business obligations

So Why Choose a Bridging Loan Over Other Financial Resources?

Bridging Loans are one of the fastest and flexible ways of securing a loan. This is especially useful if you want to move fast, have businesses to invest in or debts where you can secure collateral against.

FTO can take your individual circumstances into account and propose the best options for you based on what you would like to achieve and your existing assets.

  • We have a proven track record
  • We are fully regulated
  • We have teams and members that are suitable for all uses of bridging loans. We can help guide you through the process and give you the best possible offer to suit your needs