Bridging finance general terms of loan

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Bridging finance

Bridging finance is a short term advancement for larger amounts of money. All things should be taken into consideration when thinking of opting for bridging finance. As different brokers and lenders have slightly different bridging finance packages available, we suggest that you read through the small print of each individual lender. We have however given a general term and guide breakdown for you to read through when considering opting for bridging finance.

General bridging finance terms

So that this type of borrowing is out of FSA (financial standards agency) guidelines, typical advancement values usually range between twenty five thousand and three million pounds. It is not rare for UK businesses to apply for loans for a million pounds and over for a short period of time.

The term of loan is entirely up to you. You can repay completely at any point within one and twelve months.

If you apply for your advance through a broker or third party site, you may have to pay a finder’s or set up fee. Dealing direct with a principle lender will cut out the middleman, using meaning no introduction costs or consultation fees.

You will have to make interest payments each and every month. You only pay interest fees until you want to clear the full amount of the loan at once. Typically interest rates tend to be between 1.5 and 3 percent depending on loan value and your credit history.

The financing value tends to be worked out on the equity in the property you are going to use as security. It is usually between sixty and eighty percent of the equity. In essence if you have one hundred thousand pounds of equity built up in a home or building, then you would be able to borrow between sixty and eighty thousand pounds.

You can clear bridging finance at any point. Ideally, you would have to give the lender at least thirty days notice. When you clear the full amount, you make one final interest payment alongside it. This can be done from thirty days right up to twelve months. Obviously the quicker you clear the debt, the less interest you have ended up paying.

Your home or property is at risk of repossession if you do not keep up your repayments or clear the value of the advance within the short term time span.