Bridging Loan for Property

I looked up the word "loan" on my computers thesaurus and it offered me the following alternative words:

So, it is fair to say that anyone who provides the above is effectively giving you a loan. Whether, it is for three months or twenty-five years, they are all types of loans with varying degrees of interest charged depending on the length of time you borrow it for.

It's therefore safe to say that a Bridging loan for property is an advance, a credit facility or a finance option that is available to you. As the name suggests, its main use is to Bridge the shortfall of money when there is a time delay between the buying and selling of two properties.

A Bridging loan has many advantages in that it is only for a short period of time and the means to pay it back are usually in place. This type of loan can be done in a matter of days not weeks with little consideration to the client's credit history.

Property investors, traders and developers use many types of loans, e.g. to acquire property, to refurbish property, to buy land, to develop land etc. These people look at money in a totally different way than most, and by this I mean they see money as a "financial tool" to get the job done, make their profit and get out.

For example ...

  1. If you had to dig out footings or level off some land for landscaping, you would just hire a JCB for a couple of weeks. Same with a Bridging loan for property that you are buying, it is only required for a couple of weeks and then you give it back.


  2. On a development, the fencing, scaffolding, temporary huts etc. are required for the duration of the building work and once built, taken away. This is similar to Development Finance, as the properties are sold the money is paid back to the lender.

When you cost a job, whether it is a refurbishment or a new development, all the plant and tools you need to hire are built in to the appraisal. This applies to the "money" you are hiring as well such as; interest charges, arrangement fees, exit fees etc. are all included. If you are stilling making a healthy profit after all these cost have been taken into consideration then the deal is worth doing.

Therefore, using a Bridging loan for property is just another financial tool to use when getting the job done!


Bridging Loan Fact
Bridging loans are only designed for short term lending and no reputable lender would enter into an agreement unless there was an exit strategy in place to pay them back within the agreed timescale.