Every investor wants to make the most out of their purchases and we don’t see why not. It takes a lot of time, resources and hard work to find the perfect asset for a sweet deal. But we all know how acquiring real estate can be such a taxing job. Luckily, there’s commercial bridging finance that comes to every entrepreneur’s aid.
But what is it and what makes it the perfect weapon of choice? Simply put, commercial bridging finance is a tool that helps investors to acquire their chosen assets faster and more effectively. It provides a short term or temporary loan that fulfills or satisfies short term liquidity needs aka the pre-purchase costs necessary to the transaction pending the availability and/or application of a permanent and often bigger financing (e.g. bank loan, mortgage, and sale proceeds).
Because time is of utmost importance when it comes to real estate and commercial ones for that matter, buyers have to act fast or risk losing the opportunity to another interested party. Remember that the better the asset is, the more heightened the competition becomes. We all want a good deal and anyone will make the move the soonest they can.
The security deposit, the amount paid to the seller as a security that prevents them from selling the asset to someone else for a period of time, is crucial and so is the down payment without which there will be no sale. Let’s not forget about the other pre-purchase expenditures such as the survey costs, research expenses and professional fees to name a few.
These upfront costs are so immediate in nature that many buyers often miss out on an opportunity because they fail to have the money when they need it. But because commercial bridging finance is designed to work for these situations, it is way faster to arrange and does not come with as much fuss in terms of documentary requirements.
Moreover, commercial bridging finance is temporary or short term in nature so it does not pose burdens or risks for a prolonged period of time like its long term counterparts. Plus, providers offer a flexible repayment scheme where users can opt to pay prior to maturity thereby reducing the interests or at maturity which is the date by which one’s main financing has been released and which shall be used in part to close the bridge previously taken out.