Funding Solutions

Bridging Finance

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What is bridging finance?

Bridging finance, also known as a bridging loan, is a short-term financing option used by many businesses as a way “bridging” a gap between needing access to finance now and a point of time in the future when sufficient funds will be generated in order to repay the loan, usually after turning a profit. Or it can act as a type of short-term loan if a business is in need of urgent funding.

Bridging loans are usually arranged within a short timeframe. For this reason it is a common method used by businesses to raise money in order to capitalise on an opportunity. An example of this could be closing a deal that is time sensitive where that deal could be lost if funds fail to be raised on time.

How can business owners use bridging finance?

One of the most common reasons for taking out a bridging loan is when purchasing a property, as it is a way of accessing full funds without having to go down the traditional mortgage route. In a case such as this, the property itself will be put down as collateral with the lender. You may find yourself in this situation if your company is expanding quickly and you are looking to purchase new offices.

Typically a bridging loan can be secured within a matter of days, or even within 24 hours depending on the lender, and is therefore ideal for quick turnaround projects when there is an urgent need for cash and there is security available.

Bridging finance for property development

 Bridging loans are also a useful tool as a form of short-term borrowing when a property development business only requires the funds for a short amount of time, usually whilst the property is refurbished, extended or some other form of value being added once it has been purchased.

Bridging finance could also be of assistance in providing all of the funds required to purchase a property at auction and to fund the development process, which will be repaid once the property is sold shortly after acquisition.

Find out more about bridging finance

Our Funding Solutions team have relationships with a number of bridging finance providers. To begin exploring the option of bridging finance, or to simply get some expert advice, please visit our contact us page and fill in the form to get in touch, or give our team a call on 0800 731 2466.

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