A Bridging Loan is typically a short term funding solution provided by a lender on an interest only basis, secured on property or land and for a term of no longer than 12 months. There are numerous applications for utilising a Bridging Loan, whether to bridge the sale or purchase of an asset or to provide temporary cash flow. Whatever the reason the popularity of Bridging Loans has grown markedly over recent years with many new lenders entering the market.
Cranfield are experts at sourcing commercial bridging solutions for its clients. From developers seeking to secure funding to acquire a new site to property investors sourcing funds to be able to respond to investment opportunities or businesses looking to refinance away from current providers, Cranfield has access to lenders to assist you.
How much can I borrow? -
Typically, funding on commercial and residential investment property can be achieved up to 70% of loan to value (“LTV”). However 100% funding can be achieved subject to additional security being provided to the lender. It should be noted that some lenders will base their lending criteria on the open market value of a property whereas others may only consider the 90 day “forced sale” valuation.
Interest and Fees
Depending on the LTV interest can be rolled up within the facility or, should the client prefer, interest settled as it falls due for payment. The term of the loan can range from 1 month to 2 years with many lenders charging a minimum of 1 month’s interest. Fees may vary with arrangement fees being typically 2% of the loan value with, in some instances, an exit fee of typically 1% also payable.
So who can benefit from a bridging loan?
- If you need purchase a new commercial property before you have sold your old one.
- If you need to raise funds quickly to meet a creditor payment such as corporation tax liabilities.
- Bridging finance is increasingly being utilised by Developers to purchase sites quickly either off market or through auctions with additional funding provided to help meet the build or refurbishment costs of the scheme.
- A bridging loan can be used for almost any purpose by businesses operating in virtually any sector where repayment will either come from the sale of the secured property or by a pre-agreed route.
At Cranfield we appreciate the importance of delivering a timely funding solution that meets the needs of our clients. As members of the NACFB we have access to the whole market, providing a fast and efficient service.
The search for the right financial solution begins & ends with Cranfield, so contact us today.