What is a bridging loan?
A commercial bridging loan is a short-term loan secured on a commercial property such as a warehouse, barn, industrial unit, or office. Bridging finance can help your businesses to cover infrequent expenses that need payment quickly.
A commercial bridge loan functions by offering businesses a temporary capital source to finance the purchase of a new property. Typically, it is secured against the value of the business’s current property or the new property being acquired. These loans usually have a term spanning from a few months to a year, providing businesses with sufficient time to finalize the sale of their existing property.
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Check bridging loans for Planning, Purchase/Refinance, Developer Exit, and Refurbishment.
Benefits of Bridging Finance:
- Faster capital access in contrast to traditional financing
- Lenders tend to offer more flexible terms for temporary loans
- Easier to obtain: this funding option is more accessible compared to traditional loans and mortgages
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How do commercial bridging loans work?
Bridging loans are short-term, interest-only loans that are usually arranged for up to 18 months (although some lenders offer longer terms).
During the term of the loan, interest is usually rolled into the loan and repaid at the end of term, or sooner if the loan is repaid early. As such, there are usually no monthly payments to make.
What is bridging finance used for?
Bridging finance to get a working capital boost or to cover short-term cash flow challenges, or to purchase a property at auction.
It’s important to bear in mind that although bridge loans provide immediate cash flow, interest rates are higher, and you’ll typically have to offer collateral.
At Anglo Scottish, we can support your bridging loan application by approaching our panel of lenders to make sure your business gets the best deal available.