Short term bridging finance for private or commercial usage | Article ...

Tuesday, March 27th, 2012. Author : SonzaOlinsky658. 48 views.

For many years people have been choosing bridging loans as a short term finance option when cash is required promptly but only for a short time frame. This has been as a rule for bridging a hole in capital during the purchasing of a new residence and the sale of an existing home when completion on the sale and purchase are not able to be arranged for the very same day. A new bridging loan will be able to offer you the money necessary to complete the purchase before the sale of the existing property has completed. Afterwards, when the selling of the old residence has finished the bridging loan will be paid back.

For business, if money is needed for a short time period, a commercial bridging loan can often be the most suitable option given that set up costs and early repayment charges can be more affordable than long term lending alternative. When taking out commercial bridging finance it is important to take into consideration that commercial bridging finance should only be employed as a short-term manner of finance. The reason is, they often have a high rate of regular monthly interest and are as a result a costly long term option. Plus the commercial bridging loan companies will want their funds back at the close of the agreed term, and being unable to do so will incur more charges and potentially end up in the loss of the property.

Having said that bridging loans can be used for lots of reasons and ever since the credit crunch there?s been an increase in the number of bridging finance loans being applied for when other kinds of lending has substantially reduced.

For renovating and extending, home and property finance can be raised via using bridging finance. On the other hand a more suitable and less expensive alternative tends to be development loans, which may also be kept for refurbishment and extension projects. Generally development loans are used for new build work, which could be constructing a new single property or intended for large scale housing and business developments. The huge benefits of development loans are that it can be precisely designed to supply the cash needed for property development and is often released in phases as it is required. Interest only and roll up options are readily available and development finance solutions typically have borrowing periods of 36 months.

Bridging loans can be organized in a short time because they?ve got adaptable lending criteria. The bridging loan providers take into consideration the valuation of the property or properties that are being given as security, as well as the method by which their loan will be paid back. This adaptive lending criteria means that less processing needs to be done which helps you to save time. It is also this flexibility that has to a certain extent led to the increased financial lending needed for bridging finance, because more people decide on bridging loans as an alternative solution to the banks who?ve got much more limitations.

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