8 Advantages of Bridging Loans That Will Blow Your Mind

When finance is required only for a short period, there is no better alternative than a bridging loan. In most cases, they are the cheapest choice for raising the required funds. Additionally, you can arrange them faster than most other modes, they have a flexible lending criteria, approvals are given quickly without much ado, and they can be secured on all kinds of property, even if they are not considered suitable by other lenders.

Here we discuss the most important reasons why bridging loans are common in the UK:

Refurbishment, Renovation, Restoration of Properties
Quite often properties are deemed unfit for mortgage purposes. This happens due to their poor condition, or in the case of residential property and buy to let mortgages, or when the property lacks a kitchen or bathroom. Bridging finance can be easily secured on properties that are considered unsuitable by other lenders. This is incredibly helpful for landlords or property developers who purchase properties to restore and then sell or even refinance with a buy to let mortgage, keeping it to rent out.

For Auction Properties
When an auction is won, a deposit of 10% is paid just after winning the bid, the rest of the funds are required within 28 or so days. For this reason, bridging loans become instrumental in buying auction properties without much hassle. Not only can they be set up quickly but they also ensure that the deal can be completed within the required period.

Re-bridge
For those who want to arrange new bridging facilities, bridging loans are used to replace existing loans that are approaching their end. It helps in replacing existing facilities with cheaper alternatives, to release more funds, or to extend a loan term.

To Make Quick Purchases
To secure the acquisition of an absolute bargain, the purchase often needs to be completed in a short period. When funds are not available to make this purchase, because your capital is tied up in some other asset or estate, a bridging loan can be arranged quickly. You can secure it on the available equity of your property.  Sold the bargain item later at a profit and repay your bridging loan.

Resolve Short-Term Cash Flow Issues
Cash flow problems are quite common when running a business. These problems are easily solved with the help of bridging loans from commercial real estate bridge loan lenders.

Inheritance Tax and Probate Issues
Many times funds are required when dealing with probate issues and inheritance. Some problems include having to release charges on the property, other bills, pay tax, and pay off other beneficiaries.

Property Development
Bridging loans are used to raise the funds required to finance developing properties.

Prevention of Repossession
When a property is due to be repossessed, a bridging loan is used to pay off the debt and prevent the repossession. This is useful for the owner to retain control of the property so they can sell on their terms and prevent a forced sale situation.