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 Bridging Loans: Securing Finance when Time is Critical Bridging loans are a specialist type of secured loan which can be particularly useful in time-critical situations. Secured loans in general can be quicker and easier to arrange than unsecured personal loans but the underwriting process can still be lengthy in the case of larger secured loans such as mortgages. Speed is one of the reasons why bridging loans have become the go-to finance product for both businesses and consumers in situations where turnaround time is of great importance. When time is critical there is perhaps no faster or more convenient option available than bridging finance. You will need to have sufficient security to cover the loan amount but the application and underwriting processes are generally much simpler than those of other types of secured loans. Specific instances where bridging loans are considered the ideal alternative to a traditional secured or unsecured loan: Fast Property Purchases One of the most common applications for bridging finance is purchasing properties at a bargain price, before your competition. Whether commercial or consumer, getting a great deal on a property often means snapping it up quickly while the opportunity exists.  Instead of waiting months for a traditional mortgage application to be approved, bridging loans can be paid out within a matter of days. Buying Property at Auction The same also applies to properties that go under the hammer at auction which can often be purchased for well below their market value. The only proviso is that you rarely have more than 28 days to pay for the property in full. This time frame is often out of the question with traditional mortgages but perfectly possible with a bridging loan. Urgent Business Expenses Businesses can face unexpected outgoings and/or higher-than-expected costs. Unfortunately, these unexpected costs often arrive at

Traditionally bridging finance is best defined as a short-term lending, often over a period of between four weeks and eighteen months but this can extend longer with the consent of the lender and sufficient documented reason. This type  of lending is commonly referred to as a bridging loan in the United Kingdom, it is also called a caveat loan and swing loan in other countries that offer the same type of financing. While the headline interest rate on bridging finance can seem fairly high, compared to traditional loans, this does not give a fair reflection of the bridging loans value and popularity  and the uses in the property market sector. UK BRIDGING FINANCE FACTS Many reports into the UK bridging finance market show some very interesting numbers on this often ignored area of debt finance. Some of the basic facts include:- • Average loan to value 45% • Average term of bridging finance 11 months • Average monthly interest rate 0.84% • A first charge was in place on 83% of bridging loans • A second charge was in place on 17% of bridging loans Many people will be surprised to see current interest rates charged by bridging finance companies compared to those of years gone by and how competitive the rates are. The most popular reasons for securing bridging finance are:- • Property refurbishment 27% • Mortgage delays 25% • Re-bridging loan 13% • Business purposes 11% • Auction purchases 9% • Other 15% While it is fair to say that the majority of bridging finance relates in some shape or form to property transactions, both commercial and residential, there are other areas in which it is useful. While these industry figures make for interesting reading, the situation for high net worth individuals/investors can vary markedly. Platinum Global Bridging