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How to get a commercial bridging loan

How to get a commercial bridging loan

What is a commercial bridging loan?

Commercial bridging loans are an ideal solution for people seeking short-term financing. Our borrowers can be limited companies and also individuals. Whether you need funds to purchase a property, refurbish a recently acquired property, for business cashflow or to cover debts until a property sale is completed, a commercial bridging loan can provide the necessary funds.

One of the main advantages of a commercial bridging loan is its fast access. The lender will consider the loan amount and the security you offer, and based on this information, they can make a lending decision in as little as 24 hours. This swift process makes it a great option for businesses in urgent need of financial solutions.

How to use a commercial bridging loan

A bridging loan is a different product altogether to a standard, conventional mortgage. A commercial bridging loan is there to serve a solution to a short term finance requirement and is typically repaid by way of a refinance onto a long term loan, or the sale of the asset.

All borrowers are credit checked, and the plausibility of each transaction monitored.

What is the difference between a commercial bridging loan and a commercial mortgage?

There are some key differences between a commercial bridging loan and commercial mortgage:

Speed to complete - One of the major advantages of bridging loans is the speed at which they can be completed. Unlike commercial mortgages, which can take months to finalize, bridging loans can be processed and completed in a matter of weeks. This is mainly due to some lenders ability to automate processes like valuations, and streamline the underwriting process.

Term length and interest rates - Bridging loans are designed to be used for short periods of time, often no more than 18-months, whereas a commercial mortgage could have a term of many decades. The rate charge is therefore relevant to a product of this nature.

What is the difference between a residential bridging loan and a commercial bridging loan?

The Financial Conduct Authority (FCA) regulates residential bridging loans on the customers main residence or intended main residence and imposes an affordability test for such loans. This means that in order for a lender to provide a regulated residential bridging loan, the borrower must be assessed as being able to afford the repayments on their current mortgage and all other outgoings (such as utility bills).

On the other hand, commercial bridging loans are not subject to regulation, making them suitable for complex property finance scenarios. However, their interest rates tend to be higher as a result.

How can you arrange a commercial bridging loan?

We can complete in as little as 48 hours from enquiry to completion. Commercial bridging loans are usually arranged within 24 hours. If you want to know more about commercial bridging loans, please contact us on 0161 823 7993 or complete our contact form. We'll be happy to help!

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