Bridging loans are a useful facility when it comes to short-term loans. They come in handy when you have a large financial need that you need serviced quickly. These short-term loans are a cost effective option when looking to borrow large cash amounts. Usually, bridging loan amounts are given from 25,000 pounds.
Bridging Loan Advice
Before you can acquire your bridging loan, you must have an exit plan in place. This is important because the loans are short term and you must repay your loan before its term ends. Bridging loans can be quite costly when used for purposes other than short term since they have a higher interest rate and also charge a renewal fee should the repayment term go overboard. One of the major exit strategies people have is offsetting a property. With such a plan in place, you need to consider whether or not the property’s value will be sufficient and if the property can indeed be offset quickly.
Still on bridging loan advice, another option you may want to consider is refinancing. This especially works when you took out the loan to work on a development or renovate a property that was in a poor state. Your now restored building or newly developed property can be used to step in as security to refinance your loan.
Alternatives to a Bridging Loan
A good alternative to taking these loans is using financing facilities such as a buy to let mortgage, development finance, secured loans, asset loans, commercial loans and commercial mortgages. These options give you more time to repay your loan hence more flexible interest rates and you are also able to get more funds available for your project.
While bridging loans are great in meeting quick financial needs, they are not always the friendliest option. Using the options given with the bridging loan advice above, you should be able to find a suitable finance option for your financial needs.
Tagged: bridging loan advice, business, finance, money
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