Bridging Loans Overview

Bridging loans, in essence, are short term secured loans that “bridge” the time gap of a particular transaction, such as a certain period of time in between buying and selling of a real estate or a period of time where a business owner need to cover for the expense before he receive payment from a client.

Here are some uses of bridging loans:

• To raise money to fill a gap in property sales.
• To quickly close property deal, e.g. buying a property in an auction.
• To purchase a new property before you sell the existing one.
• To temporarily fund the purchase of a defective property.
• To help the cash flow of a business who sell goods on credit.

Due to the nature of bridging loans, they have a higher interest rate and you need to provide collateral to secure the loans. Some of the typical collateral for the purpose of bridging loans includes houses, auction properties, retail stores, lands, rental properties and commercial or semi-commercial properties.

Here are some features of bridging loans:

• Bridging loans mature in a short period of time, ranging from days to a year (maximum.)
• You can access the bridging loans within 5 working days from your application date.
• The amount of bridging loans ranged from $50,000 to $500,000, depending on certain factors, such as your credit requirements and financial situations
• You can get bridging loans in the amount of 70% – 100% of the value of your collateral.

Since bridging loans are secured loans, you must understand about open-ended bridging and close-ended bridging.

Open ended bridging refers to a transaction in where the repayment source is already made available, but not guaranteed in term of the usage. I.e. a homeowner wants to sell his house but no interested buyer makes any offer, yet.

Close ended bridging refers to a transaction in where the repayment source is already in place, but a definite time of the transaction is still unknown. I.e. a homeowner has already sold his house but he hasn’t received the payment, thus creating a gap needs to be filled.

Bridging loans are available for people with any credit ratings, and can be applied online. All you need to do is to fill in an application and you will be contacted regarding the approval of your bridging loan application.

Image by svilen001.

Share and Enjoy:

Related posts:

1. How to Obtain Commercial Loans In the recent period of time, banks have been…
2. How to Obtain a Secured Loan Secured loan is issued against collateral security of property,…