A bridging loan (or ‘bridge loan’) is a loan which allows you to borrow money for a short period, usually up to one year. It can help to ‘bridge the gap’ to secure funding to buy a new property quickly. For example, bridging loans can help homeowners purchase a new home while they wait for their current one to sell. In this situation, your existing home will be used as collateral.
Buying a Property – Purchase a property quickly
Property Auction – Buying property at an auction
Property Development – Renovating or remodeling a home
Business Purchase – Purchase a new business with a shortfall in funding
Business Working Capital
Pay a Large Tax Bill
With Friends Capital, you can borrow up to £10million to secure your purchase. Bridging loans are a reliable, short term tool when you know that alternative finance will soon be available to repay the Bridging Loan. Get in touch today to find out how much you could borrow, and how quickly our lenders could get it to you.
Bridging loans are a perfect way to raise large amounts of finance fast. You can use a bridging loan to:
Fast to arrange – quick access to finance
Flexible lending – secured lending means no lengthy checks and bad credit accepted
No excessive fees – whilst bridging loans have higher interest rates, these rates are paid back fast and are controlled
Extensive potential – a bridging loan can be used for a range of different purposes often with no questions asked
When you start looking into bridging loans, you will notice some terms and phrases that describe the different types. Examples of bridging loans include:
You can apply for a bridge loan that is either a closed or open-bridge loan. The type you choose will depend on whether you know a date for paying it back. If there is a specific date that you will repay the finance, you will have a closed-bridge loan. So if you have a buyer for your house with a completion date, this will allow you to buy the new house before that date.
Open-bridge loans are an option if you don’t know exactly when you will be paying it off. It is a useful option if you are buying a new house before having a buyer for your current one. You can use the loan to make sure you don’t miss out on the home you want. If you are considering renovating your house before putting it on the market, an open-bridge loan will give you the money you need.
When you get a bridging loan, it will be either a first charge or a second charge loan. These terms refer to who is the priority for repayment in the case of a defaulted loan. If you have financing to buy a new house with a mortgage on an existing home, that is a first charge loan on your old house. The mortgage will be the priority for repayment if the house is repossessed.
Or you can use the bridging loan to clear the old mortgage making it a first-charge loan. If your new house is the security on the bridging loan, you have a first-charge bridging loan. The paperwork relating to the financing will show you what type of bridging loan you are getting. It will also show which property, or properties, are security for the loan. Any security for the loan is at risk if repayments are not met.
One of our friendly advisors will either call you back within 24 hours (usually the same working day), or will take details from you in order to best deal with your situation.
When you speak with us, we will take a ‘fact find’. At this stage we take basic details about your situation. We will then search the whole of the market and find you the best deal available.
If you are happy with the deal that we offer, we will then contact the lender for you and get you what is called a ‘decision in principal’.
If you’re happy with the decision in principal then we will secure this deal for you and deal with the application for you on your behalf.