Consider Bridging Finance When Time is Tight

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Consider Bridging Finance When Time is Tight

By Jackie Johnson

When in the process of financing a commercial or residential property, it is often the case that cash flow becomes restricted due to unforeseen delays in processing the main funding. Bridging loans can be considered as an option to ensure that you are able to proceed with the deal. The delay of a pending property sale or other circumstances centered around time-critical elements of your proposal may make it necessary to apply for an interim bridging loan to ease the burden of waiting for funds to be released from another source be it long term funding or the sale of another property.

Bridging loans are either closed or open-ended. Closed bridging loans have very clear exit strategies that depend, for example on the successful sale of another property. Therefore a clear exit strategy might involve an exchange of contracts, with a known completion date for the sale of a particular property. Alternatively, an offer for long-term funding that allows for the bridging arrangement to be paid off is also a clear exit strategy.

Open-ended bridging loans, because they lack a clearly defined exit strategy, are seen as a higher risk by the lender and are treated accordingly. In both closed and open-ended bridging arrangements, timing plays an important role for the borrower and very often is one of the most critical factors, if not the most critical factor when arranging this type of financing.

Bridging arrangements can be made to fulfill a great many useful roles when considered as part of a borrowers overall financial requirements. A quickly arranged and implemented bridging loan can have a crucial role to play when buying or selling properties, during the negotiation process for restructuring existing finances, to meet the deposit requirements of properties sold at auction and so on.

Most borrowers do not have time to ?shop around? when considering this type of finance. Timing and other pressures may influence a borrowers ability to make clear decisions right at the time when he or she should be most focused on the details in order to get the best deal – and this is where someone like DIY Funding can help. That being said, borrowers should expect this type of loan to be more expensive than more traditional forms of financing and loans of this type are generally set at an interest rate of between 1% – 1.5% per month. However, because time is of the essence and because bridging lenders can move quickly they do tend to charge a higher premium for this type of loan.

Well experienced in the intricacies of bridging finance, DIY Funding have over 20 years of experience and expertise in arranging this type of finance for individuals, partnerships, businesses and companies. They draw on their relationship with all the major UK lenders who specialise in these types of loans and through the DIY Funding Pack provided enable the borrower to work directly with those lenders that most closely match with the borrower?s specific needs and requirements. Direct access to key decision makers within these specialist lenders is crucial so that time is not wasted in trying to locate the right person to speak to.

When time is critical, an effective introduction by a broker to the right lender is crucial. This is where DIY Funding comes in. DIY Funding?s services are quality oriented, borrower specific and inexpensive. The DIY Funding Pack is tailored to suit the specific need of the borrower. In addition, DIY Funding has a zero-percent brokerage fee ? unlike the high costs associated with many other brokers who charge a 1% fee based on the overall loan.

This means that the only thing the client pays for is the comprehensive DIY Funding Pack so they can commence the loan application process with the lender. DIY Funding can provide the expertise, the experience and the contacts to fund a borrowers needs quickly. Visit http://www.diyfunding.co.uk today for more details and see how they can help finance your next project whether you need interim funds, a long term mortgage or any of a variety of other financial arrangements.

About the Author: DIYfunding is a site I?ve created to help you get the best possible finance deal for business, property, development or bridging. All without the need to pay a broker. For more information on bridging loans visit http://www.diyfunding.co.uk.

Source: www.isnare.com

Permanent Link: http://www.isnare.com/?aid=340137&ca=FinancesThis blog started out as a simple repository of basic information, then it grew to be a place on the web that is dedicated to bridging finance. We thank everyone who contributed to our blog and also the people who painstakingly take time to read and comment – to make our site the best that it could be.

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