7 Common Questions about Commercial Bridging Loans
In business, financial needs cannot be delayed for very long. If you don’t deal with them swiftly, the problem can escalate and in extreme cases lead to heavy losses and bankruptcy. But what if it isn’t possible to have the necessary cash in time? You simply need a short term solution. A commercial bridging loan is usually the best (and sometime the only) solution. With such a loan any cash gaps in your commercial financial requirements can be closed before cash flow becomes a big issue. You probably have a bunch of questions about getting this kind of commercial loan. Here are some of the most common queries people have.
1. How much can I borrow with a bridging loan?
A great strength of these loans is that you can borrow a large enough sum of money to sufficiently meet your needs. The loan amount can vary from 25,000 pounds to 1 million pounds. Depending on the collateral on offer, the lenders policies and your overall requirements, this amount can be extended.
2. How soon will the money be in my account?
There is no long waiting period for getting the loan. Usually it is just a matter of a few days. On average it takes just 3 working days to receive the money. Based on your situation and the lender, the amount borrowed can be transferred even earlier.
3. What purposes can I use the loan for?
There are lots of different situations you could utilise these loans. Pay off creditors, expand the business, fix a cash flow problem, purchase commercial property or launch a new business venture.
4. What sort of assets can be used as collateral for the loan?
Property is the most commonly used form of collateral. It could be any type of property such as a commercial or semi-commercial property, retail shop, development site, buy to let property, land (with planning permission) or residential property.
5. What kind of interest rates should I expect with bridging loans?
The downside of a short term loan is a slightly higher rate of interest. The good new is that with increasing competition you will have some choice among loan providers and able to choose a rate of interest suitable for your needs.
6. What if I want to pay back the loan earlier than agreed?
This entirely depends on the policies of the loan provider. Some will have a substantial early repayment fee. Other will have only a minimal charge for repaying earlier. If you are able to pay back the loan early, check with the lender to make sure you don’t end up paying more than needed.
7. My credit rating is poor. Am I still eligible for a bridging loan?
Credit checks are not a major part of this type of loan. Since the money borrowed is back by collateral, lenders can accommodate everyone regardless of their past credit history.
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5 Reasons for Getting a Bridging Loan
Bridging loans are often used to effectively deal with a financial problem. But what makes such types of loans useful? Here are the top 5 reasons you should consider get a bridging loan.
1. Bridging the Cash Gap
As is often the case, financial transactions can go wrong in a variety of ways. When buying and selling high value items such as property, you may need to pay for expenses or the new property before you have the funds available. Normally this would cause the entire transaction to fall apart, but luckily bridging loans were created for situations just like this.
2. The Perfect Short-term Solution
A bridging is a loan you get for a short length to cover any gaps in funding or available cash, while completing a larger transaction. Usually you will have a long-term funding plan, but in the mean time you need something to keep things moving along. A bridging loan is usually the best answer.
3. Easy to Apply
Competition and technology has made the loan application processes super simple. You have lots of companies to choose from, which gives you the opportunity to compare terms and conditions and shop around for a great deal.
Specialist online lenders are some of the best companies to approach. FinanceMyHouse is one such sites, and a leading UK bridging loans provider. Applying for the loan is as easy as filling in the short application form on the site’s homepage. The only personal details you need to enter initially are your company name, first and last name, mobile or home number, and an email address. Then you decide on how much you need to borrow and set a repayment period. Lastly choose between the bridging or development loan options, to indicate for what purpose you need the loan. You won’t be left waiting for very long to hear the decision. In most cases you will get a reply in less than 30 minutes.
4. Quick Access to Cash
There is very little waiting time for getting these loans. It is at most a matter of a few short days. Typically you can expect the loan amount in your account within 3 days. This speed is important as most situations that warrant these types of loans, have to be dealt with very swiftly.
5. Bad Credit History? No Problem.
If you have a poor credit score or are self-employed, you will be severely limited in your borrowing options. Most types of loans will be closed to you, or incredibly difficult to secure. However, since these short-term loans are backed by collateral, lender will be more than willing to take the risk and give you a loan.
These loans are very popular, and for good reason. When you are in a tight financial situation, there’s no need to crumble under the pressure. Get a bridging loan and solve the problem.