Timing is everything in the world of property finance, it can make or break opportunities. Bridging loans have grown increasingly popular over the years and have emerged as a dynamic solution, providing speed and flexibility to individuals, or businesses. Whether your clients are homeowners seeking quick funds for a house move or a renovation, or investors considering a time sensitive property deal, here at Crystal Specialist Finance, we work with an extensive panel of lenders who offering increasingly competitive rates and terms to cater for almost any situation, whilst providing a fast and reliable service.

In this short guide, we will explore the different types of bridging loans, what they are used for, and the benefits associated with bridging loans and property transactions. Read on as we address the question: Are bridging loans a good idea?

What is a bridging loan?

A bridging loan is a short-term arrangement secured against property or land allowing you to access funds whilst you are waiting on cash elsewhere, typically lasting between one month to a year. As the name suggests, it is used to bridge a finance gap until a longer-term solution can be arranged. This loan comes in two forms, regulated and non-regulated.

Regulated - Used by homeowners in need of money quickly due to them falling short of funds. The borrower lives in the property the loan is for.

Non-regulated - Designed for business or commercial use, to ‘bridge’ a payment gap. It is exclusively for investment purposes and the borrower does not live in the property the loan is for.

Main reasons for using bridging finance

• Buying a property before selling a current home

• Buying an auction property and need access to quick cash

• Fixing a broken property chain after a sale falls through

• A renovation project

• Buy-to-let property investment

5 key benefits of bridging finance

The greatest benefit of a bridging loan is that it allows your client to be competitive in their offer to buy, despite their down payment being tied up in another property, leading to excellent outcomes that otherwise wouldn’t be possible.

1. Speed

Known for their rapid approval process, compared to traditional long-term financing options such as a mortgage or conventional business loan. It is ideal when time is pressing, as money can be secured in a matter of hours which could keep a property transaction on track. We have streamlined evaluation processes, allowing us to access and approve loans much faster.

2. Flexibility

Offering flexible terms, including loan amounts, repayment plans and interest payment options ultimately allowing the borrower to structure the financing in a way that is suitable for their needs and repayment capacity. We have rates that start from as little as 0.68% pcm.

3. No Early Repayment Charges

Often, there are no monthly payments to make, unlike a traditional mortgage. When money is tight, more outgoings are the last thing anyone needs. Instead, the borrower will only be charged interest on the months that their loan is outstanding, making it much easier to manage than other types of debt.

4. Borrow Large Sums

Due to bridging loans being secured against a high-value asset (typically a property or land), people can borrow large sums as lenders see these types of loans less risky for them. Various factors influence the amount that an individual can borrow, these include the type of property, the intention for the property and the value of the borrower's available assets.

5. Temporary Financial Bridge

If a client is planning to secure a property, complete a business deal or address unforeseen expenses (e.g renovation costs) this temporary financial bridge provides stability and ensures that financial gaps don’t disrupt their plans.

At Crystal Specialist Finance, we pride ourselves on delivering outstanding customer service to brokers nationally. We aim to make brokers' lives easier by providing profitable and clear solutions, even for the most complex problems.

If you have clients that are interested in taking out a bridging loan, our friendly team of experts would be happy to help. Contact us on 01827 337710 or enquire through our CrystalHUB to get a quote today. We’re the clear choice for securing a suitable lender, and fast.