What is a Bridging Loan?

If you own your business or are looking into property development, you may be interested in bridging loans and the opportunities that they can give you if you choose to take one out. Bridging loans are a popular form of financing for those looking to invest in property and can be used in a wide variety of situations, which will be explained in detail below. Read on for more information about bridging loans, what they can do for you, and how they can help you with your investment.

How can you get a bridging loan?

Before you find out about their benefits, it is important to know how to secure a bridging loan if you need one, with many bridging loans being offered online. For instance, at Alternative Bridging Corporation, you can apply instantly online with a quick response that will allow you to take out a commercial or residential loan as soon as you wish.

What type of loans are they?

The first thing that you should know about bridging loans is that they are short term loans that you must repay reasonably quickly, with many loan durations having a maximum of 2 years. Bridging loans offer you a wide monetary value depending on the type of loan that you take out, with many loans being in the millions, enough to invest and develop properties. When you take out a bridging loan, you are effectively securing a loan against a property, often commercial.

There are two types of bridging loans available, and these are a first charge and second charge loan. The difference between these is that a second charge loan will be based on a property that already has a mortgage on it that has not been paid off, whereas first charge loans are for the first loans that you take out against a property.

What can you use bridging loans for?

Bridging loans are most commonly used for investing in property, whether that be purchasing new premises, or expanding and developing current buildings under business ownership. Bridging loans are mostly used in a business context, with commercial and industrial properties being a favorite for bridging loans, although residential properties can also be used on occasion. They are also commonly used as temporary loans to bridge the gap between the purchase of one building and the sale of the next, allowing investors and buyers to smoothly buy and sell the property without the difficulties of perfect timing.

What are the advantages of a bridging loan?

• You can get the money from a short term loan almost immediately, allowing you to buy a property before it is sold to another viewer, which can be a problem without the right financing to invest in properties straight away.

• Bridging loans allow you to buy properties that are relatively expensive, with loan sizes going up to the millions, whereas other types of bank loans often total a few thousand.

• Bridging loans also allow almost anyone to apply for them, with only a few restrictions as to their eligibility, meaning that the majority of applicants can get access to the money offered.