Bridging Finance has often been seen as an expensive form of finance, which allows property buyers to move quickly to secure properties with a short buying period.
Typically, bridging finance has been used for properties with a 1-2 month completion period. However, it has always been a premium product: as recently as a year ago, bridging finance could cost between 1-2% per month.
That situation is now changing and the cost of Bridging Finance for residential and commercial properties has been reducing rapidly with different types of loan products being created to meet gaps in the property finance marketplace.
Bridging Finance can now be secured from as little as 0.5% pcm, which is close to smaller loans from Clearing Banks, which can cost 4-5% over base. Compared with some Challenger Banks it can be a similar price or sometimes cheaper. Competition is increasing with numerous new lenders forcing existing lenders to accept lower returns.
The main difference of course is the speed of credit approval which can be 24 hours and the limited due diligence required for the loan, which is due to the bridging lender’s principal focus being the property and clear report on title, rather than the full borrower position.
New bridging or short-term loans are now available for the following purposes:
Bridging Finance is evolving to fill finance gaps, moving at the speed of the property market and providing flexibility for investors and developers when they are buying, asset managing or developing properties.
To discuss bridging finance and other funding opportunities, please contact Stuart Buchanan of Acuitus Finance (+44 (0)7879 432868 / +44 (0)20 7034 4850 / firstname.lastname@example.org )