Bridge loans are a popular financing option for property developers. But what are they, and how do they work? This blog post will explore everything you need to know about bridge loans, from how they work to whether they’re the right financing option for your next development project.
A bridge loan is a short-term loan used to finance the purchase of a new investment property before the sale of the current property is complete. The loan is secured by the old property and is typically used for three to twelve months.
Bridge loans are typically used by investors looking to purchase a new property before their current property is sold. The loan allows them to buy the new property without having to wait for the old property’s sale.
The most significant advantage of a bridge loan is that it can be a quick and easy way to get the financing you need to purchase a new property.
If you’re thinking of using a bridge loan to finance the purchase of a new investment property, it’s crucial to understand how the loan works.
Some of the benefits of bridge loans include:
- They can help you finance the purchase of a new investment property quickly.
- They can give you the flexibility to manage your finances more effectively.
- They can be used for other purposes, like renovating a property.
Advantages of a Bridge loan when compared with a bank loan
In many cases, a bridge loan can be more attractive than a traditional bank loan. Here are some of the advantages of bridge loans:
1. Bridge loans are easier to qualify for.
One of the most significant advantages of bridge loans is that they are much easier to qualify for than traditional bank loans. This is because bridge loans are typically based on the value of the property being used as collateral rather than the borrower’s creditworthiness. As a result, business owners with bad credit can still qualify for a bridge loan.
2. Bridge loans can be used for a variety of purposes.
Another advantage of bridge loans is that they can be used for various purposes. For example, a bridge loan can be used to purchase new equipment or expand a business.
3. Bridge loans can be a quick source of funding.
Another advantage of bridge loans is that they can be a quick funding source. In many cases, bridge loans can be approved and funded within days. This is much faster than the approval process for a traditional bank loan.
4. Bridge loans can be a flexible source of funding.
Another advantage of bridge loans is that they can be a flexible funding source. For example, a bridge loan can be structured so that it can be paid back over a period of time that suits the borrower.
Broker Vs Direct Lender
When securing a bridge loan, most customers approach brokers rather than going directly to a lender. However, by doing so, they miss out on the many advantages of choosing a direct lender.
For one, going through a broker means you’ll likely have to pay higher fees. Brokers typically charge a commission for their services, which can add up.
Moreover, working with a broker can also lead to a longer loan process. That’s because brokers typically have to shop for a lender willing to work with you. This can add unnecessary time and stress to the already complicated process of securing a bridge loan.
But perhaps the biggest downside to working with a broker is that you won’t have as much control over the loan process. When you work with a direct lender, you can be more involved in the decision-making process and have a say in the loan’s terms and conditions.
Ultimately, working with a direct lender is the best way to secure a bridge loan. By bypassing brokers, you can save funds and time and have more control over the loan process.
Why is Bridge Direct the first choice for Bridge Loans in the UK?
Bridge Direct is the first choice for Bridge loan services in the UK. The primary reason is they are direct lenders, not brokers. They have 35 years of experience in the bridging loan industry and based on an emergency; they offer the immediate decision on any Bridge loan request.
Bridge Direct offers a wide range of benefits for their clients, making them the best choice when availing of bridge loan services. Some of these benefits are:
- They are direct lenders
- They have a wide range of products that cater to different borrowers’ needs.
- They have a very experienced team in the industry for over 35 years.
- They offer an immediate decision on any loan request so that you can get the funds you need as soon as possible.