The Case For Bridging Finance
- When ever speed is essential: unlike other lending secured on property, a bridge can be resolved very quickly.
- Between Sale & Purchase: be it a commercial property or residential, sometimes the timing of the transactions are not in sync and you may need a solution that allows the purchase to go ahead before your sale is completed. If you have agreed a sale on your property you may consider this to be a closed bridge but, unless you have exchanged contracts, the buyer can still pull out so your bank may still consider this to be an open bridge!
- To Prevent Re-Possession: if the relationship with your existing lender has reached this stage, reconciliation is unlikely and so you need to act very quickly if you are to have a chance of rescuing your property. A bridge can be arranged in time and ICAN Finance have often been involved in buying time with the court and/or the lender!
- Buying At Auction: you have to pay in full after one month so a bridge may be the best way of concluding this in time.
- Buying At Full Valuation: there may be circumstances in which you can buy at a bargain price but mortgage lenders will always lend against the lower of valuation and purchase price. However, they will lend against valuation in order to pay off a bridge.
- To Increase Value Before Committing To Long Term Finance: you can greatly enhance the value of the property once you own it and would prefer to borrow against the completed value. The may be possible via other routes but a bridge can be a quick and reliable option.
- To Increase Value Before Sale: you may own a property that you want to improve or renovate before selling, in which case you will only need a short tem facility rather than a mortgage or long term loan.
- Second Charge Funding: bridging lenders normally require a first charge but some will lend on a second charge. If the funding requirement is short term, this can be cheaper than re-mortgaging or long term facilities.