What is a bridging loan?
A bridge loan is effectively a borrowed amount which is used to cover a gap in long-term finance arrangements or to cover specific short-term requirements.
With similar amounts of finance as a mortgage, but with a shorter-term repayment structure, bridging loans are often used to ‘bridge‘ the gap in moving a business into new premises or cover a home loan while you wait to sell.
But you may be wondering, why should I take out short-term financing?
Based in Scotland, we are experts in the Scottish bridging loans market, finding the best bespoke funding solutions available for our clients across the country (including Glasgow, Edinburgh, Fife, Dundee and Aberdeen) and throughout the UK.
We provide guidance, support, and services to secure the best market leading rates that will meet all your requirements for short-term financing. With an extensive network of lenders and specialist knowledge in all financing areas, we are here for you.
Get in touch, whether it is to simply ask 'what is a bridge loan?' or discuss your specific requirements and how we can help find you the best rates on the market.
For property deals, a bridge loan can provide quick access to funds in situations such as when you wish to buy a new home before the complete sale of your existing property or if you are looking to buy at auction and need funds immediately.
The two types of this short-term bridge loan are:
A fixed repayment date
The most likely option for those who have exchanged contracts but are waiting for the property sale to complete.
No fixed repayment date (although you are normally expected to pay it off within one year).
When a bridging loan is taken out, a 'charge' will be placed on your property. This charge acts as a legal agreement that prioritises the lenders who will be repaid first your loans not be repaid.
If your property has a mortgage, it will likely be the case that a 2nd charge loan is what is taken, which that if the loan's repayments are completed, your home will be sold off to repay the debts with the mortgage being paid off first.
If the property is owned outright, or the bridge loan was to repay a mortgage in full, a 1st charge loan would be taken out. This means that the bridge loan would be paid off first if you fell behind with repayments.
Our panel of specialist finance lenders can arrange bridging loans for many reasons, typically:
It is essential to consider your exit strategy before committing to a bridging loan, as this is a form of secured loan, and your property is at risk if you don’t secure funding in time to repay the bridging loan at the agreed date.
Please note that specialist finance of this type is not always authorised and regulated by the Financial Conduct Authority; therefore, our funders can afford to adopt a more flexible approach to assessing deals. Whatever your situation, give us a call to see if we can help.
The quickest way to have your short-term finance enquiry assessed is to telephone one of our advisers on 01738 583008 or complete the online enquiry to start the ball rolling.
If you have landed on this page and you are not a direct client looking for a lending solution, perhaps you are interested in introducing business to us? If so, please call now for more details or follow the Introducers Link.