Bridging Loans

Bridging Loans

Short term Bridging Loans from £25,000 to £25,000,000

Looking to build a property, complete a purchase of a new home when a chain has been broken, extend a lease or purchase a property at auction? A bridging loan could be arranged in as little at 48 hours for these or many other purposes when traditional lending sources simply can't help.

Why not call our specialist bridging team today; we can arrange your loan over anything from 1 to 24 months for almost any purpose.
Our loans are available to private individuals and limited companies and can be secured on a residential, semi-commercial and commercial property or land - it doesn't matter what the construction is or the condition, type or use of the property - we can help.

Get a fast decision on your application.

The bridging loans we arrange directly are not regulated by the Financial Conduct Authority.

  • Building a property on a piece of land
    Ever fancied having your own grand design, we can help get you started.

  • Raising money for a business venture
    Generating capital for business acquisitions, stock purchase, etc.

  • Refinance of existing bridging loan
    Do you have a bridging loan coming to the end of its term but you're not quite ready? We can help.

  • Altering a property structurally or cosmetically
    Where a new arrival means you need an extra bedroom or you simply want to change the layout of your house.

  • Buying a property at auction
    Bridging finance is especially useful for purchase at auction or if the property is to be developed and sold on within a short period.

  • Property not habitable
    Do you have a mortgage agreed once a property is habitable, for example, no kitchen or bathroom? We can bridge the gap.

  • Purchasing a property
    For your purchase of a new property when the current property is not yet sold or you've had a break in a chain.

  • Payment of a tax bill
    These can often creep up on us and sometimes you need a bit of help in the short term.

  • Completing an existing property project
    Have you started to build a property but your existing finances have fallen short?

  • Divorce settlement
    We can help raise quick bridging loans in awkward circumstances.
     

Traditional monthly repayments on bridging finance

Most bridging loans are structured in such a manner that you will repay the interest on the loan each month, and then repay the full principal at the end of the loan. This method of borrowing suits customers who will have a consistent regular cash flow throughout the lifetime of the loan and will be able to service monthly payments without over-extending themselves.

However, it is also possible to pay off the interest alongside the principal of the loan, and even deduct some or all of the interest from the loan advance.
 

Rolling interest

Rolling the interest on your bridging loan means that you will make no repayments during the lifetime of the loan; rather, you will repay the rolled interest upon the loan’s redemption.

The interest is usually compounded, which means that it will be calculated anew at the end of each loan period (usually a month). So whilst monthly payments reduce the outstanding balance each month and are therefore the same, repayments accrued under compound interest actually become a little larger.
To give an example: repayments on a 12 month, £100,000 loan with interest charged at 0.75% will be £750 per month. The full cost of the loan at redemption will be £109,000.

With compound interest, the first payment will be £750, the second £755.63 (0.75% of £100,750), and so on. The cost of this loan paid with rolling interest will be £109,380.69.

This example only costs an average of £32 per month more than the non-rolling loan, but rolling the interest at higher interest rates, on larger loans or for longer terms can really add up.

The flipside is the ability to make full use of the loan without having to worry about monthly repayments, and for borrowers seeking smaller, shorter-term loans, rolling interest can be extremely useful.
 

Interest deducted

Rather than pay rolled interest at the end of the loan term or pay it off throughout in monthly instalments, you can also opt to deduct it from the principal at the start of the loan.

In the above example, for instance, you would deduct the £9,000 of regular interest repayments from the loan advance, meaning that you would only receive £93,000. However, you would avoid compound interest and would be free of monthly repayments, giving you the flexibility needed to focus on your project. Structuring a loan in this manner is particularly conducive to longer terms of up to 24 months.
 

Combinations

It is also possible to combine any of the above three options. For instance, you could deduct half of the interest from the advance of the loan and then roll the remainder to redemption. You could even deduct half of the interest, roll a proportion of the remainder and then make regular repayments for the last two or three months, when the project is nearly finished.

Every bridging loan is a bespoke product tailored to meet the borrower’s needs, so give us a call today on 0800 195 3757 to see how we can structure a loan to suit you.

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