What 's the Purpose of Bridging Loans?
A bridge loan can be used when a deadline is approaching, such as breaking chains, purchasing property at auction, or closing a business opportunity. Buying and selling properties are bridged with a bridging loans.
With the advent of bridge loans, major banks have become more restrictive in their terms, as well as speeding up the funding process, with capital available in weeks rather than months.
Bridging loans are commonly used for the following reasons:
- Quickly complete a property transaction
- Breaking a property chain
- Buying property at auction
- Renovations of properties
- The purchase of secure land
- Invest in vacant or distressed properties.
- Business opportunities will cease.
Contact our award-winning customer service team by calling +44 (0)203 556 9137 or by emailing info@toptoncapital.co.uk
Who Uses Bridging Loans?
Investing and developing property often require quick access to capital. A bridge loan is a faster and more flexible alternative than traditional bank loans for expanding portfolios. Bridging is also an excellent option for developers who have funds locked up in other assets.
Business owners with a lot of inventory, property or assets might use bridge financing in order to access capital for growth. It is a popular type of financing for hotels looking to renovate, as well as for airlines.
By using bridging, UK homeowners can break their property chains and complete their next home purchase quickly. Tapton Capital does not offer regulated bridging.
Bringing property deals to completion and carrying out renovations are popular uses of bridging loans.
The Benefits of Bridging Loans
Bridging loans can be used to finance residential or commercial properties. You could either improve the property and sell it, or rent it out to generate additional income.
Real estate transactions are done quickly.
Compared to mortgages, bridge loans allow you to close property transactions more quickly. Typically, it takes two to four weeks to complete a deal due to the product’s fast funding capabilities. Bridging loans can help you close a BTL opportunity faster than your competitors if you need to close the opportunity quickly.
Breaking a property chain
Bridging loans enable you to become a cash buyer immediately, regardless of whether other parties are still waiting in the chain or whether there has been a chain break recently.
Invest in property renovations
The bridging loan provides a quick and effective way to obtain funds for light and heavy refurbishments. These loans usually act as second mortgages and can provide significant funds to renovate a property to increase its value. The property can either be sold or converted into a buy-to-let mortgage once it has been completed.
Upon completion of renovations, your property will be worth more, and you will have the option of refinancing into a long-term mortgage with a more favourable interest rate.
Invest in property renovations
Purchases of secure land
Bridging loans are available to buyers while they wait for planning permission. Upon approval, a bridging loan cannot be used for development work; instead, a development loan or mortgage might be used.
No or Limited Income Assets
Bridge loans offer greater flexibility than bank loans. Despite not having assets or income, a lender might consider your application if you have a valuable property and carefully prepared financials.
Buy Distressed or Vacant Properties
Renovating distressed or vacant properties may qualify for development loans. Completing and renovating the property can add a significant amount of value.
Cease Business opportunities.
Bridging loans can be used by businesses of all types to close a commercial deal. Using land, property, or assets as collateral can be extremely valuable if you need short-term funding before long-term financing is available.
Tapton Capital offers bridging loans quickly. When can I expect to receive one?
Tapton Capital can provide a decision in principle within 24 to 48 hours of your initial enquiry. The completion of bridging deals typically takes between 2 and 4 weeks after a valuation, survey, and underwriting.
If you have any bridging enquiries, please contact our award-winning customer service team at +44 (0)203 556 9137 or info@toptoncapital.co.uk