411homerepair.com

Latest Articles

Ingenious Method to Get Rid of Ants at Your Home

Have you ever walked into the kitchen in the morning to go rinse off some dishes and spotted ants?  Or maybe you've been showering and...

on Feb 17, 2019

How Water Softeners Can Help Sell Your Home

Tips On How Water Softeners Can Help Sell Your Home Did you know that having a water softener can help you sell your home? It can, and that’s...

on Feb 15, 2019

Simple Steps to Replace an Old Radiator

  If your home isn’t being heated efficiently, it may be time to replace the radiator. Old, corroded radiators use more energy than...

on Feb 15, 2019

Improvements That Can Increase Home Value Best

Improvements That Increase House Values You may live in your home the rest of your life. If you ever sell, however, simple improvements can...

on Feb 14, 2019

Tools to Add to Your Home Woodworking Toolbox

A lot of home repair projects involve a bit of woodworking. On its own, woodworking is a great hobby to get into, mainly because you can play with...

on Feb 13, 2019

Using Bridging Loans in Your Property Purchases and Renovations

by James Helliwell on Jul 26, 2018

The world of finance is rapidly growing especially in the field of bridging loans in many areas from parents helping their children onto the housing market all the way to helping to grow small (and larger) businesses with a short-term injection of investment capital. There are various ways to help businesses move ahead with these particular financial instruments.

Statistics point to the growth of these loans typically since 2011 increasing steadily year by year from £750 million per annum to over £4 billion in 2017 demonstrating the practice is becoming very popular in the main.

Banks with higher lending criteria are leading the rise in the industry pushing popularity higher each year and generations of better awareness is growing. Additionally, there is steadily increasing competition between both brokers and loan providers which is all helping expansion in this area.

What is Bridging Finance?

This kind of practice is generally a short-term finance tool to enable financial injections into a “vessel or project” allowing for faster completion and so achieving the main goal of all parties in the agreement which is the repayment of the loan. Short term bridging finance typically classified as being up to and around £25 million with the specified time frame and typically last between three to 24 months.

There can, of course, be pitfalls if the borrower cannot achieve the agreed repayment plan in the time frame that was initially agreed upon and this can then result in a potential loss, due to the implementation of the pre-agreed retainer or penalty clause.

Bridging Loans and Property Purchases and Renovations.

Property developers are using bridging loans to both secure and renovate dwellings for a speedy turnaround as well as a fast profit it is generally a less risky turn around as long as the lender feels he can finish in the time frame.

The bridging loan works secured on your property to raise the necessary extra funds required. You borrow against the asset for a short-term loan. This way you avoid the normal process of applying for a mortgage and use the bridging loan to raise the funds instead. Here is a great guide.

Additional Business Applications.

For example, If you have bought a property as a sole trader, private individual or a company, it works on similar principles. If you need to acquire a million pounds for funding you would place a ten percent stake down with the lender, receive the million and you now would have typically 28 days to complete the transaction or you might risk losing your stake depending on what you offered upon agreement. If you were to do things the more traditional way you might have to wait weeks for the mortgage to go thru but with bridging finance, you can borrow the £1M at a 50 percent loan-to-value and receive the funds at the point of initiation of the agreed deadline.

CCA Regulation Insurance

The bridging industry is CCA regulated meaning it has to conform to the industry standard regulations like the brokers and lenders within the scope of laws to protect the customer's rights under the banner of the CCA. This means that anyone applying through a broker, they are obligated to offer the cheapest loan product available, regardless of who they choose to work through.

Business Applications

Business owners can use this method just as easily. If you wanted a loan to improve your business you could offer your office building as collateral to bridge the loan. Further examples are things like funding an investment opportunity quickly and turning it around in time to meet a cutoff point with your lender.

Bridging

Loans could be used for many applications from startups companies, stocks and shares etc or can also be funded in this way so long as you have the documentation and or business plan and these can be used by the lender to consider you for finance solely on these as collateral.

In the event you have a poor credit rating this may not be too much of a problem due to the fact the lender will not tend to make a decision on this as you have (in this instance) provided the security up front. There are also what are termed ‘non-status lenders’ such who look at the potential value of the property, asset or business to evaluate the opportunity for funding instead.

Sponsored Articles

Random Articles

9 Amazing Design Tips and Techniques for Starting a Small Garden

It’s hard to enjoy anything fresh or natural when you live in the city. The smoke rising in the morning at the nearby factory on the commute...

Garden / Landscaping / Patio

Removing Urine Stains from Floors

Chances are your dog didn't make it outside, your child didn't make it all the way to the bathroom or you inherited a home with...

Floors / Tile / Hardwood

Making the Modern Bathroom

In terms of bathroom design – in my experience – there seem to be two predominant camps: that of the traditional, vintage look and that of the...

Kitchen / Bathrooms

Carpet Care: How to Repair Burn Marks

New carpets are lovely and can completely change the look of a room, but in time they can become stained and worn, even with proper care. Carpets...

Floors / Tile / Hardwood

Choosing Vintage Chairs and Dining Tables

There is no way to deny the fact that your dining area is highly important. That is where you spend quality time with family members and guests....

Interior Design / Decor

Actions

Contact Us | Submit Article | 411homerepair © 2019