Bridging Finance literally means ‘to bridge the gap’, this can be taken in a number of ways; to bridge the gap before entering into a long term mortgage, or to bridge the gap between contracts where cashflow will be an issue.
The main reasons a bridging loan is taken is for quick completion of a property purchase, to raise capital for cashflow or to help repay adverse debt. These are just some of the more common uses, however a bridging loan can be taken for almost any reason.
All you initially need is a property in the UK with sufficient equity to service a Loan to Value (LTV) no higher than 85% maximum (more typically 70%) – this differs subject to the property type.
To work out LTV please use this calculation: (Property Value x 70%) minus the Current Mortgage Provider’s Charge (if applicable) .
This will provide you with a gross figure that we can lend up to. Please note that the minimum gross amount for secured lending is £50,000.
Bridging finance has become a very competitive market in recent times with all the major banks looking to gain a foothold in lending in this sector. Each lender has a key USP that helps them become tailored in the market space.
I.e. some have gone for the low pricing model, however this impacts the speed for completion whilst others look at a very quick turnaround whilst charging higher rates. Rates start from 5% flat rate per annum with a maximum term of 3 years.
There are two main options for repayment of a Bridging loan and they are:
We can have funds ready for you within 48 hours of acceptance of the loan, however for the more complicated cases this can take up to 4 weeks.
Each case is different, and it will very much depend on a number of variables.
RLA Capital have over 40 years of experience in providing specialist bridging finance facilities. This coupled with our outstanding customer services levels and extensive funder panel leaves us best placed to benefit your business in this area. Please do not hesitate to contact a member of our dedicated team to discuss further.