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Bridging finance lenders

Have you seen advertised or ever heard people use the term bridging finance and wondered what type of borrowing it was? We are going to explain how a bridging finance advance can work for you, the difference between lenders and brokers and review the services offered from different financial institutes and loan companies in the UK offering bridging finance.

What is bridging finance?

Bridging finance differs from other forms of secured loans in a few different ways. You will find that different principle lenders, companies and brokers will have slightly different packages available for commercial applicants and home owners. The main points comprise of no fixed term and interest only repayments.

No fixed term equates to the fact that you are not locked into a set time frame. Normal secured loans are termed at three or five year repayment plans. With a bridging loan or bridge finance you clear the loan when you want to, or can do. However, this doesn't mean that you can owe the full amount long term. You are contracted to repay the full amount anywhere between one and twelve months.

Interest only repayments is fundamentally self explanatory. Each month, the payment you make is the previous month’s interest charges. You do not pay off a piece of the loan with it, so in effect; you never owe more than you have borrowed.

There are also no early repayment penalties like with other forms of secured borrowing.

If bridging finance is used correctly, it is a highly quick, efficient and cheap way of borrowing large amounts, which will be secured against property, over a short term without being locked into a repayment plan or risking high early repayment charges.

You can use bridging finance for any purpose.

Key bridging finance facts

• Never owe more than you borrow
• Flexible repayment between one and twelve months
• No early repayment penalties
• Property is needed as security
• Interest only repayments until you clear the whole amount in full

Typically, you should be looking at interest rates of two percent or less making it a cheap short term solution. Please be advised that a broker may charge you a set up or consultation fee, whereas the actual principle lender will not.