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OPTIONS OF SHORT TERM FINANCE - PART I

Short Term Finance is a financing requirement for shorter duration arising temporarily, until some other alternate is available. This has led to evolution of concept of Bridging Loan. It is a short term funding to provide temporary financing until more permanent finance can be found. Bridging Loans are available for a whole range of financial requirements and can be on the basis of a 1st, 2nd or even 3rd charge equity release, usually provided for any legal purpose e.g.

  • Commercial & Residential Purchase;
  • Commercial & Residential Refinance;
  • Auction Purchases;
  • Capital Raising; *
  • Chain Breaking;
  • Refurbishment;
  • Speculative Deals;
  • Business Cash Injection;
  • Defective Property.

 Capital raising funds can be used for many reasons including holidays, overseas property investment and tax bills etc.The collateral or security for such type of finance are:-

  • Residential Property;
  • Commercial Property;
  • Land (with or without planning permission in place);
  • Real Property (such as Plant machinery).

Bridging Loans carry a higher interest rate than standard mortgage lending, and during the time of offer of loan the repayment is agreed which could be any period between one day to two years.

Usage :-Bridging Loans are most commonly used when the financing requirement is urgent and beyond the timescales that a standard mortgage lender or bank could provide. In some cases Bridging Lenders can provide funds within 24 hours. Another common use of bridging finance is found in cases when a new home is purchased even before selling of existing property.

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