The world of commercial bridging finance is one which is often shrouded in mystery. There are no comparison websites, no off the shelf packages and can be difficult to secure affordable terms. Over the years we have seen a growing number of our high net worth clients looking for commercial bridging finance for many different reasons – from property investment to business acquisitions. There is a common misconception about the real cost of commercial bridging finance which is relatively short term and a means to various forms of refinancing.
Bridging loan criteria
Over the years we have arranged commercial bridging loans for a number of different purposes such as:-
- Management buyouts
- Portfolio deals
- Capital release
The criteria and terms for bridging loan finance will vary depending upon the specific assets being acquired, their long-term value and an exit route. Where start-ups and management buyouts are concerned, commercial bridging loans tend to be a means to an end, which is refinancing within a maximum of three years. It is possible to arrange bridging loans from anything as short as 24 hours in duration up to 3 years.
Applying for bridging loan finance
To say the market is fragmented is an understatement. This is an area of the financial markets which has been cut adrift by the mainstream banks and financial institutions – unwilling to take on the risk. There are many factors to take into consideration such as income streams, exit strategies and fallback plans. The reason why it is difficult to compare and contrast interest rates and terms is because no two situations are ever the same. Bridging loan terms will vary significantly as a consequence of the situation, those is applying for the finance and the economic outlook at the time. Therefore, it is imperative that you seek professional financial advice which is where we come in.
As with any loan finance, it makes sense to utilise your existing assets as security to reduce long-term finance costs. We can work with you to put a package together which includes income and security. The more security offered the more preferable the terms, the clearer the exit strategy the more amenable the bridging loan/refinancing companies will be. We have the contacts, the experience and the skills to negotiate the best deal for your situation.
Additional financial requirements
As we touched on above, bridging loan finance is typically seen as a short-term solution with a long-term goal in mind. Where property is being developed the finance will likely cover the redevelopment costs after which the property would be refinanced on an enhanced valuation. Where business and start-up finance is required this offers breathing space in which to grow the business, enhance the reputation and ultimately look to refinance on more favourable terms. In many cases it is simply the need to obtain a “financial footprint” which is the greatest pull towards bridge loan finance.
As we are independent we have access to hundreds of financial institutions offering everything from bridging loan to refinancing options, from secured lending to unsecured funding. It is as important to put in place an exit-route/refinancing as it is to secure the initial finance. We can advise you every step of the way, secure the best rates for your situation and maximise your existing assets without undue risk. Why not give us a call today for a no obligation chat about your requirements and we will research the latest rates and the best terms and conditions for you.