Guide to Bridging Loans
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By cutting out the middleman, these types of peer-to-peer business loans can often be achieved at a cheaper rate.
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Why choose a Guide to Bridging Loans
See if this is the right business loan for you
- Unsecured business loans of up to £250,000 for terms up to five years are available
- Secured business loans of up to several million are subject to asset quality, credit checks and LTV
- You must be an established business, usually with two years trading history
- The business must have clean credit, no CCJs or recent defaults
Frequently Asked Questions
Frequently Asked Questions
What is the most import an thing to consider when being approved for a Bridging Loan?
Your exit. The first thing lenders will want to know is how you intend to repay the loan and how credible that plan is
How much can I get?
There is no maximum nominal amount but it depends on the LTV. For a 1st charge we can get up to 75% LTV and for a 2nd charge up to 65% LTV all depending on the nature and location of the property/asset being offered as security.
How long can I have a Bridging Loan for?
Normally up to 12 months but in some circumstances you can extend to 18 or even 24 months though interest may need to be periodically serviced in these longer loans.
Can I get one on an unmortgageable property?
That’s exactly what Bridging Finance is for. You can use the bridging Loan to bring the property to a mortgageable condition and exit the Bridging Loan with that finance.
How fast can it be arranged?
It can be done in 48 hours but at a cost, so we would prefer to say 5-7 days.
Can I get one if I have adverse credit?
Generally speaking yes, but if your credit is very severe then maybe not.
What will the cost be?
Interest is expressed monthly and is from 0.5%-1.75% per month. Lower rates are for loans with a low LTV, on a property/asset that can be easily resold in the event of foreclosure, a strong-credit borrower and a clear exit.
What are the fees to arrange a loan?
If you choose to use us to arrange your finance you will be charged a fee of typically 1%. Additionally there may be a lender fee (usually 2%) to be paid and it is usual in this market that the borrower also pays the lender’s legal and valuation fees.
Why should I use a broker to arrange a Bridging Loan?
You can do all this yourself but with 80+ lenders out there, we can more quickly get you to the best rate and also ensure you are borrowing from a reputable, established lender. We will also guide you through the application process and ensure your application is presented to the lender in a manner than makes it most likely to be accepted at the lowest rate.
What is the maximum LTV available for a second charge bridging loan?
Probably no more than 70% LTV is available but it depends on the asset and the exit strategy
By cutting out the middleman, these types of peer-to-peer business loans can often be achieved at a cheaper rate. To qualify for crowdfunding, your business must be profitable and prove you are able to make repayments.
Crowdfunders look at historical data and won't lend against projections.
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