Bridging Finance France
Bridging Finance for France is usually short-term financial solutions though they are also used in a variety of other sectors for short term lending with quick decisions. As the name implies, French bridging loans are used to bridge the gap between a debt coming due and the main line of credit becoming available; a common use is to purchase a property before a mortgage can be put in place.
French Bridging finance is usually a highly flexible and adaptable form of finance that’s suitable for many different borrowers, but it’s important to understand what is and isn’t suitable for before proceeding with an application. Anyone considering taking out a bridging loan must ensure that they fully understand the terms and conditions associated with the loan, and should consult their lender or broker before proceeding.
How Does Bridging Finance Work for France Property?
A bridging loan in France combines the purchasing power of a mortgage with the flexibility and speed of a personal loan; borrowers are able to access large sums of money without waiting for weeks for funds to become available. Because of this flexibility, bridging loans may be used to secure an asset quickly, which is often a high priority in property development. In fact, many bridging lenders boast lending times of less than a week, with decisions in principle sometimes available on the day of application. Once the asset has been secured, a long-term financial solution (such as a mortgage) can then be put in place, and the bridging loan repaid.
This can be a powerful tool because it enables buyers to circumvent the tight restrictions and slow pace of mortgage lenders. For instance, a property developer might have the opportunity to purchase a building at a bargain price – it’s currently in need of repairs, but they have the skills and expertise to refurbish it. Unfortunately, they don’t have the cash to purchase the property outright and must borrow to cover the cost. Because the property is unmortgageable (as it’s uninhabitable), the deal is sunk: however, the developer is able to take out a bridging loan instead. This will cover the cost of purchasing the property and of restoring it to a mortgage-able condition; once this is complete, a mortgage will be arranged and the bridging loan repaid. In this way, bridging finance can enable developers to take advantage of opportunities they otherwise wouldn’t be able to, which keeps the real estate sector fluid and flexible.
France Bridging Finance Main Features:
- Typically have a higher interest rate.
- Lenders may require cross-collateralization and a lower LTV ratio.
- Normally short-term, 3 to 12 months.
- More profitable.
- Commercial Bridging from EUR250,000 to EUR500m.
Repaying a Bridging Loan in France
The flexibility and speed of a France bridging lender loan comes at a higher price than a mortgage, and interest is typically charged monthly rather than annually. This means that a bridging loan can be extremely expensive if not handled properly, as a 1.5% monthly interest fee adds up to a whopping 18% over the course of 12 months. Because of this, most bridging loans are kept as short as possible, and borrowers make sure they have a secure exit strategy in place.
A bridging lender in France will usually take pains to stress-test their borrower’s exit strategies, ensuring that when the time comes they will be able to repay the loan. In many cases, an exit strategy consists of the sale of the property, but most lenders will work with their clients to establish a viable repayment strategy.
Because bridging loans are secured against the borrower’s assets, the bridging lender will be able to reclaim any lost payments through the sale of the debtor’s security. Depending on the lender, this can be a first or second charge against the property itself, on the borrower’s own house, or on other assets (some commercial lenders will allow businesses to use assets like machinery and vehicles as security.
Types of France Bridging Finance
1st Charge Bridging Loans
Bridging loans are a flexible form of finance that can be put to many uses; in this article we discuss the application of 1st charge bridging loans and finance
2nd Charge Bridging Loans
Bridging loans are a highly flexible form of finance, and we discuss why the ability to secure a 2nd charge on a single asset can be invaluable for borrowers
3rd Charge Bridging Loans
Bridging loans are a highly flexible form of finance, and we discuss why the ability to secure a 3rd charge on a single asset can be invaluable for borrowers
Bridging loans for auction finance are a crucial link for purchasing property at auction, enabling developers and landlords to complete purchases quickly
Bridge to Let Finance
Buy to let properties are a great way of securing a productive investment, and landlords can use bridging loans as a fast and flexible way to purchase property
Buy to Let Finance
Buy to let investment is still one of the most popular ways to acquire real estate, and bridging loans are a vital tool for securing rental properties
Buying Before Selling
Buying before selling enables homeowners to break free of their property chains, and can often be achieved with the help of bridging finance.
Chain Breaking Finance
Breaking free of the property chain is crucial for many buyers, and bridging finance is often an ideal way to jump-start a property purchase
Discounted Purchase Finance
Bridging loans can be used to enable the purchase of property at a discounted price, where speed and flexibility makes them an ideal choice for property developers
Though it is never pretty, divorce is sometimes simply a fact of life. Bridging finance helps divorces resolve quickly and smoothly with the minimum disruption.
Fast Property Purchase
Completing a property purchase quickly can be highly valuable to many buyers, and bridging loans can offer the ideal solution for a quick purchase
Freehold & Lease Extension Bridging
Purchasing a lease extension or freehold to maintain property’s value is often the right choice for owners, and bridging loans enable fast leasehold extensions
High Value Property Bridging
High value property is a highly competitive sector of the UK real estate market, and requires specialist bridging lenders to provide bespoke financial solutions
The UK Inheritance Tax is a significant bill for an estate’s executors. Meeting this quickly and easily is a task that bridging finance is ideally suited for.
Non-Status Bridging Loans
Non-status bridging loans enable investors to develop their portfolios without the restrictions of affordability assessments, and are a powerful form of lending
Personal Bridging Loans
Personal bridging loans are one of the most flexible financial products there are, and bridging lenders are able to meet the varying needs of their clients.
Bridging loans are hugely flexible and may be put to a variety of uses; one common use is to help resolve probate issues loans while waiting for inheritance UK.
Downsizing can be a smart move for many property owners, and a stable form of finance such as a bridging loan is needed to provide flexibility and security
Quick Purchase Bridging Finance
Moving quickly can often be make-or-break for a deal, and it’s important that professionals are able to access fast-moving sources of finance.
Regulated bridging loans are loans secured by first charges or second charges against a property which is currently, or will be, occupied by the property owner.
Learn the benefits of unregulated bridging loans, how much you could borrow and how much it could cost.