Why Bridging Loans Are Good For Property Development
Bridging finance is a unique way for homeowners and business owners to embrace short term loans. Bridging loans act as a literal bridge between the times when funds are needed and when funds are going to be released from an asset, most commonly a property. Individuals, companies, and corporations use bridge loans to provide funds on short-notice notice for short periods.
They are perfect for property purchases and sales because funding is easily and quickly accessible. Most bridging loans have predictable costs when there is an exact repayment schedule, and so are a great fit for inclusion in property development projects.
Money Makes Money, Fast money makes money faster!
Refurbishment projects can require a lot of money, especially where the model is to buy a property, refurbish and then immediately sell it. Because of this, many property projects involve multiple partners; some that provide financial investment and others that manage the construction.
Some people prefer to fly solo, and some property companies would prefer not to bring any more partners than necessary. In any case, the property investment market is highly competitive and successful development projects require appropriate funds at speed.
The benefits of Bridging Loans
A bridging loan can be a great solution. Here are some reasons why:
Finance can be secured very quickly. Grabbing the right property at the right time and the right price is the difference between the success and failure of an investment project. Having the funds on hand is the key to doing that. You can put this in place ahead of time, making sure that you know exactly how and when your provider can get the funds to you.
Bridging loans can be great for grabbing great deals at property auctions, where deals are quickly snapped up, and easily accessible quick loans are invaluable. A bridge loan can also avoid a lot of the stress associated with property purchases. It is a great idea to build a good relationship with your lender so that you can continue to rely on them for funds to be delivered promptly.
Bridging loan lenders are more flexible when it comes to credentials and credit histories. They prefer to give a loan on the security of an existing property. Once the legitimacy and the value of the property have been approved, getting a bridge loan is quite simple.
Though a bridging loan needs to be repaid in a short period, e.g. likely within 12 months, providers are usually flexible as to the repayment schedule.
Friends Capital are brokers with access to lenders with the best bridging loan rates on the UK market, contact us for a free, no obligation bridging loan enquiry.