Bridging finance has experienced huge growth year on year which is mainly due to a lack of appetite and the tightening of lending criteria by mainstream lenders. The bridging sector has ‘come of age’ over the past 24 months and has evolved into a versatile, flexible and innovative form of alternative finance. Lenders have diversified their product ranges to offer a suite of bridging products to cater for almost any scenario that requires short-term property backed finance. This, coupled with an influx of new lenders entering the market, an abundance of funding and a genuine appetite to fund deals have all resulted in increased competition amongst lenders and the lowest bridging rates the market has ever seen.

What is Bridging Finance?

Bridging finance is a short term loan, secured against property or land and is used to “bridge” the gap, until longer term finance can be arranged or the underlying security is sold. The key to the success of a bridging loan is to ensure that a viable exit strategy is firmly in place upon application.

Types Of Lending Covered Within This Division:

1st, 2nd and 3rd charge loans on any type of property including:

  • Residential
  • Commercial
  • Semi commercial
  • Land (with / without planning permission)
Criteria Overview:
  • Market leading rates
  • Up to 80% LTV available (100% LTV with additional security)
  • Terms from 1-18 months
  • Loans from £30k to £50m
  • No exit fees (in most cases)
  • Interest can be retained, rolled, serviced or a combination of these options
  • Funds available in staged payments (where appropriate)
  • Lending available to individuals, LLP's or limited companies
  • Light and heavy refurbishment projects
  • Auction funding available
  • Lease extensions funded
  • Lending in England, Scotland and Wales
Typical Client Scenarios:
  • Your client needs to complete on a purchase before their existing property has been sold
  • Your client is under auction terms with short completion deadlines
  • Your client is purchasing a property under market value and a quick completion is required
  • Your client wishes to release equity from a property or land for cash flow purposes on a short term basis (e.g. tax bill, divorce settlement or business use)
  • Your client wishes to purchase a property to refurbish and it is deemed unsuitable for mortgage purposes with mainstream lenders (e.g. no kitchen or bathroom)

What other costs are involved?

The lender is likely to charge a valuation fee and legal fees upfront. Costs will vary from lender to lender and will depend on the property purchase price or valuation. In addition, most lenders will charge an arrangement fee of somewhere between 1 – 2% of the loan advance. This is usually deducted from the loan advance on completion. There are usually no exit fees or redemption penalties, although a small number of lenders do still charge these. Exit fees are usually charged on development finance and can be based on the Gross Development Value (GDV) or end value of the project.

What are the Payment Options for Bridging Finance?

  • Client makes interest only payments, paid monthly in arrears
  • Most lenders will consider providing a fully rolled up facility, enabling the client not to have to make payments from their resources each month and hence improving cash flow. Rolled up interest is paid on redemption of the loan.
  • To assist clients who do not wish to make payments from their own resource we will also retain any number of months' interest and on redemption, any unallocated interest will be refunded.

What are the risks involved with Bridging Finance?

Bridging Finance is more expensive than conventional mortgage funding and is a short-term funding option. Therefore it is essential to establish a clear exit strategy to ensure the loan can be repaid (either via sale or remortgage) to avoid paying high penalty interest rates and possibly losing the home to repossession if the loan cannot be repaid.

What is Regulated Bridging Finance?

Regulated bridging finance is where the borrower or a family member will reside in the subject property.

You have two options in how we manage your client's finance:

Option 1:

You can produce an instant quotation and submit your enquiry at any time by visiting:
www.easysource.co.uk

Login to EasySource & select ‘new enquiry’

  1. Complete the pre-qualification to establish the product categories that could finance your enquiry; select the product categories you wish to compare results for and your preferred dedicated case manager.
  2. Enter the details of your client’s circumstances & produce a list of available products. Your chosen case manager will contact you to discuss the options available, the administration and valuation fees applicable and information required to obtain a decision in principle from the lender.

You can now decide whether you prefer to manage the client’s application or to pass the name and contact details to us. Your dedicated case manager will guide you through the process either way.

Option 2:

If you would prefer to simply pass your client’s name and contact details to us, you can either:

a) Call our helpdesk on 01277 500 900 Option 3

or

b) Submit your clients details online at: www.easysource.co.uk by selecting ‘call my client’

  

Contact our Bridging Finance helpdesk today:

01277 500 900

or email

bridging@brightstarhub.co.uk

Bridging Finance Made Easy