The humble bridging loan has been serving us well for many years now but not many people understand how it works in real life. If you are eager to get on the property investment ladder then you need to know all the financial options open to prospective developers so here is a brief introduction to the bridging loan and a simple explanation of the sort of circumstances in which it is frequently used to get projects up and running:
A bridging loan, also referred to as a caveat loan, is a short term financial agreement which is used when money is needed quickly. In other words it is an interim agreement which is in place to get cash before a more permanent agreement is put in place. Consequently as you can imagine it is used by people who have a potentially attractive investment opportunity or project but do not have any means of immediately cash supply. In the real world a commercial bridging loan is a frequent solution in the property investment and development market.
One scenario where the bridging loan is commonly used is when someone buys a property or piece of land at auction with a view to selling it on. The site is bound to sell but in the meantime the purchase needs to be funded - and quickly! Setting up a commercial bridging loan usually requires minimal fuss in terms of time and paperwork. The money is usually released within 48 hours and the terms are more flexible than things like mortgages.
Developers can also take out a bridging loan while planning permission is sought for a property or a site. It can be a safe bet but until the project is formally approved other means of finance are unobtainable so the loan provides the cash in the meantime pending the approval of plans.
Where can I get a bridging loan from?
When looking for a commercial bridging loan provider make sure you go with a reputable firm. With that in mind if you are looking for the most sought after bridging loan on the market then one firm you can trust is Lerwickgroup.co.uk.
A bridging loan, also referred to as a caveat loan, is a short term financial agreement which is used when money is needed quickly. In other words it is an interim agreement which is in place to get cash before a more permanent agreement is put in place. Consequently as you can imagine it is used by people who have a potentially attractive investment opportunity or project but do not have any means of immediately cash supply. In the real world a commercial bridging loan is a frequent solution in the property investment and development market.
One scenario where the bridging loan is commonly used is when someone buys a property or piece of land at auction with a view to selling it on. The site is bound to sell but in the meantime the purchase needs to be funded - and quickly! Setting up a commercial bridging loan usually requires minimal fuss in terms of time and paperwork. The money is usually released within 48 hours and the terms are more flexible than things like mortgages.
Developers can also take out a bridging loan while planning permission is sought for a property or a site. It can be a safe bet but until the project is formally approved other means of finance are unobtainable so the loan provides the cash in the meantime pending the approval of plans.
Where can I get a bridging loan from?
When looking for a commercial bridging loan provider make sure you go with a reputable firm. With that in mind if you are looking for the most sought after bridging loan on the market then one firm you can trust is Lerwickgroup.co.uk.
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