Fast Bridging Loans
Whether you’re looking to snap up an auction bargain, break a property chain, or capitalise on a time-sensitive opportunity, traditional financing methods can sometimes fall short.
This is where fast bridging loans come into play, offering a swift and flexible funding solution for property investors and homeowners alike.
How fast is fast? In some exceptional cases, funds can be released within 24-48 hours, though this is not typical and shouldn’t be expected as standard.
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What Are Fast Bridging Loans?
Fast bridging loans are short-term financing options designed to cover the funding gap between a property purchase and a more permanent funding solution.
They can also be used to temporarily raise capital, until a property is sold or refinanced.
These loans are secured against property and are characterised by their rapid approval and funding process.
Unlike standard mortgages, which can take weeks to arrange, bridging loans can often be secured in a matter of days or even hours in some cases.
The key features of fast bridging loans include their short-term nature, typically ranging from 1 to 24 months, and their focus on the value of the property being used as security rather than the borrower’s income or credit history.
This makes them particularly attractive to property investors and developers who may have complex financial situations but hold valuable assets.
explore bridging loansHow Fast Are Bridging Loans?
The speed of bridging loans is one of their most significant advantages.
While mortgages can take 6-8 weeks or more to complete, bridging loans can often be arranged in as little as 5-10 days.
In some exceptional cases, funds can be released within 24-48 hours.
Several factors can affect the speed of a bridging loan, including the complexity of the case, the property type, and the lender’s processes.
Working with an experienced broker and choosing a lender known for quick turnarounds can help expedite the process.
While a few high street lenders offer bridging loans, their service levels rarely match those available from dedicated lenders.
Read more: How Quickly Can You Get a Bridging Loan?
When to Consider a Fast Bridging Loan
Fast bridging loans are versatile financial tools that can be used in a variety of situations where speed is essential.
Property investors might consider a fast bridging loan for:
Breaking property chains
To secure a new property without waiting for an existing one to sell.
Auction purchases
To meet the tight completion deadlines often associated with auction properties.
Time-sensitive investments
To act swiftly in competitive markets and secure lucrative opportunities.
Renovation projects
To fund the purchase and renovation of properties not currently mortgageable.
Business opportunities
To quickly capitalise on time-sensitive business prospects, providing working capital or funds for expansion.
Versatile Financing: Exploring the Many Uses of Bridging Loans
Bridging loans are not just a one-trick pony in the world of property finance. These flexible funding solutions can be the key to unlocking a variety of opportunities, from property purchases to business ventures.
The beauty of bridging finance lies in its adaptability.
What can a bridging loan be used for?Unlike traditional mortgages, which often come with rigid criteria and lengthy approval processes, bridging loans can be tailored to suit a wide range of scenarios.
From breaking property chains to funding renovation projects, bridging loans can provide the financial agility needed in today’s fast-paced property market.
But the uses of bridging loans extend beyond just property transactions.
Savvy entrepreneurs and business owners are increasingly turning to these short-term financial solutions to bridge cash flow gaps, fund expansions, or even manage tax liabilities.
Who Can Apply?
Fast bridging loans are available to a wide range of borrowers, including individuals, partnerships, limited companies, SPVs and offshore entities.
While there are basic eligibility criteria, such as being at least 18 years old, the focus is more on the property and exit strategy than on the borrower’s personal financial situation.
Lenders consider most property types, from residential and commercial, to land with or without planning permission.
Your credit situation, while considered, is less important than with traditional mortgages.
What’s most important is having a clear, viable exit strategy – your plan for repaying the loan at the end of the term.
Bridging loan exit strategiesCosts and fees
While bridge loans offer speed and flexibility, it’s important to be aware of the fees and charges.
Interest rates are higher than long-term mortgages and quoted monthly. Rates can range from 0.44% to 1.5% per month, depending on the lender and the specifics of your case.
In addition to interest, you’ll need to factor in arrangement fees (typically 1-2% of the loan amount), valuation fees, and legal costs.
While these costs can add up, many borrowers find the benefits of speed and flexibility outweigh the higher short-term costs, especially when the loan enables them to capitalise on a profitable opportunity.
Benefits for Property Investors
Fast bridging loans offer several key advantages:
- Speed of funding allows for seizing time-sensitive opportunities and completing purchases quickly.
- Flexibility in terms of property types enables funding for properties that traditional lenders might avoid.
- Less stringent criteria compared to mortgages can make them accessible to borrowers with complex situations.
- The ability to act quickly provides a competitive edge in hot property markets.
Tips for Faster Approval and Funding
To maximise your chances of a quick approval and fast funding:
- Prepare your documentation in advance, including proof of ID, property details, and a clear exit strategy.
- Work with an experienced broker who understands the fast bridging loan market and can match you with suitable lenders.
- Be transparent about your circumstances and intentions to speed up the process.
- Keep the LTV as low as possible.
- Consider opting for a desktop valuation if offered, as it can be quicker than a physical valuation.
- Have your solicitor ready to act quickly once the loan is approved.
Need some help?
If you need a short-term bridging loan then a specialist broker is a good place to start. You will get expert help and advice along with a wide range of lenders to choose from.
To get matched with a specialist broker, please call us on 0330 030 5050.
