Read our bridging loan finance guide to learn about getting a bridging loan. When used correctly, bridging loans can be a cost effective method of obtaining funds against property quickly. Clearly, the circumstances of the Loan and the status of the business will effect the willingness of lenders to participate. How much can you borrow, and at what cost? Potentially though a business could anticipate realising up to 100% of purchase price, alternatively between 75% and 80% of property value. Each lender will take a differing view of risk and therefore comparing bridging loan costs is reasonable. Clearly though, time may be a factor, inviting loans from multiple lenders and following their administration, valuation survey and information needs may not be an option. Items therefore to anticipate are the interest charges to be applied typically 3%-6% above base rate, be aware of any arrangement fees set, sometimes chargeable at as much as 1% per month of loan and the closing administrative fee.
Bridging loan finance details of applications: there will generally be a valuation survey fee. Look very closely at the offer being made by the Bridging Loan Company to ensure that it is reasonable and affordable. It is always advisable to seek professional help.
How Long Does The Process Take?
It is always best to anticipate your needs and have arrangements in place prior to making commitments. If not, time will be taken in completing and processing the application, obtaining a survey of the property and reviewing financial information. Timescales vary, but “in principle” lending decisions can be obtained in hours, and money in your bank in days. Receipt of funds from the bridging loan company will normally be immediate on completion of this process.