Commercial Bridging Finance and Why You Need It

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As if real estate isn’t already complicated on its own, here comes the challenge of financing. Assets are known for being massive both in size and in value so it is no longer a surprise that one needs a lot of resources to make an acquisition. Luckily, commercial bridging finance comes to our rescue! But what is it to begin with?

Commercial Property bridging finance is an interim financing arrangement that provides a short term loan until a permanent source can be obtained or becomes available. They are popularly used whenever sources such as bank loans, mortgages, sale proceeds or income do not arrive on time but a need has to be fulfilled. Upon the arrival of one’s permanent funding, the bridge shall then be closed with it. But of all financing options in the market, why choose it?

Because it has hassle free application.

What makes it a great form of interim finance is the ease and speed by hich it takes to process compared to others of its kind. The funds can be made available in mere days or weeks for many providers.

Because it is short term in nature.

The longer the loan runs the longer borrowers shall be burdened by it. Its short term nature allows for lesser fees to worry about and lesser months to pay off as well. There are lesser risks to nonfulfillment with the use of a bridge.

Because it saves investors a lot of time.

Buyers no longer need to wait for a loan’s approval and release before they get to acquire that new building. They can use the bridge to pay up the upfront costs such as the down payment, move in and go on with operations. Time is of the essence so the faster things are done the better because investors suffer lesser risks and opportunity losses which brings us to our next point.

Because they minimize if not remove risks.

Buyers do not have to worry about failing to come up with funds needed to seal the deal on a prime asset. They need not suffer from opportunity losses brought about by failing to come up with an upfront payment for the purchase.

Because it is easy to pay off.

Commercial bridging finance allows for liberty of payment with its flexible options. It allows borrowers to choose when to pay and close it. It can be done before maturity and as early as possible or at maturity date which is the time of availability of one’s permanent and main fund line http://www.alternativebridging.co.uk/.


The Benefits of Bridging Finance

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bridging-financeIn the event that an immediate need comes rearing its head, we’re lucky to have something called bridging finance. But what is it and what benefits does it bring? If you’re new to it, we urge you to read on. This financing medium beloved by the real estate world might just be the lifesaver you’ve been looking for.

A term given to a stop gap measure known for bridging the fund gap brought about by timing obstacles, bridging finance is a short term loan taken out to provide for the immediate short term liquidity needs for asset acquisition transactions. Its popularity and widespread use is due to its number of benefits and below are some of them.

  • OPPORTUNITY

Since time is of the essence in the world of real estate, one has to be fast otherwise someone else might grab the chance before you even get close to it. Since sellers will always require down payment and/or security deposits to be made, this can be challenging for those that have their funds pending. With this financing method, we can eliminate the opportunity losses.

  • FLEXIBILITY

Unlike other types of credit, the use of a bridge provides quite the flexibility. This is because borrowers have two repayment options to choose from and they can favor whichever one suits their needs and capabilities best. As the first option, one may choose to close the loan prior to its maturity or as early as one deems fit and is capable of doing so. The second is where one may opt to repay upon maturity which is oftentimes the day when one’s permanent financing is made available.

  • TEMPORARY

Designed to fulfill short term liquidity needs, bridging loans are temporary which makes them less burdensome as compared to other credit options in the market.

  • SAVINGS

Some people choose to finance their acquisitions through credit such as in the form of a mortgage or a bank loan. Others on the other hand opt to sell the current asset they’re using and use those funds to buy a new one that suits their current needs. When that happens, they’ll have to evacuate the current space while waiting for a buyer thus the need to temporarily rent. This creates added cost. By using a bridging finance, buying the new place becomes possible even if the current one is still waiting for a buyer thereby cutting the need to spend on rent.

Bridging Finance Video

More on finance on this site:http://www.alternativebridging.co.uk/investors/