Discover a Bridge Loan

A bridge loan is a short-term financing option used to cover immediate funding needs while awaiting longer-term financing or the sale of an asset.

In 2023, bridging loans totaled £831 million, reflecting their growing importance for fast, short-term capital. Despite rising interest rates, these loans remain popular for stabilizing property deals and preventing disruptions in property chains.

Understanding Bridging Finance

A bridging loan is a secured short-term business loan used to bridge the gap between purchasing property and securing long-term funding. It can be used to:

Facilitate quick property purchases
Cover the gap between property sales and purchases
Fund renovations or developments
Provide short-term working capital
Prevent property chain collapses

Typically, bridging loans have repayment terms of 12 to 24 months, offering flexibility for businesses to act swiftly in competitive markets.

Example

Imagine finding the perfect location for your new salon but facing delays in a property chain. A bridging loan can provide the immediate cash needed to secure the property, allowing you to complete the purchase now and repay the loan once your current property is sold. This short-term, flexible solution helps keep your business plans on track, even when timing doesn’t align.

How Is Bridging Finance Used?

After selecting a property to acquire, the process for securing a bridging loan generally proceeds as follows:

Identify the ideal lender, loan, and terms that align with your business requirements. A broker such as Funding Options by Tide can guide you through a variety of options, ensuring you find the most suitable financial solution for your specific needs.

After selecting a suitable lender, prepare and submit the necessary documentation. This typically includes property details, a business plan, cash flow projections, and an exit strategy.

If the lender approves your documentation, they might proceed with a credit check on you or your business. Note that this could result in a hard inquiry on your credit report.

Once your application is approved, the funds will be disbursed to you, allowing you to complete the payment to the seller.

Depending on the lender, you may be required to pay the interest monthly, or it could be rolled into the final repayment along with the principal. Some lenders offer a hybrid option as well. Typically, the bridging loan is repaid in full, including any interest and fees, once you’ve sold a property, secured a mortgage, or obtained other long-term funding.

Discover a Commercial Bridge Loan with Corporation Capital

Explore a Commercial Bridge Loan with Corporation Capital. This short-term financing option is designed to help you bridge the gap between property purchases and long-term funding. With flexible terms and quick access to capital, Corporation Capital can help you secure the funds you need to move your business forward.

Locate a Bridging Loan

The details provided here are for informational purposes only and should not be considered as financial advice. It is important to seek professional financial counsel before making any decisions regarding your financial situation. Loans and credit agreements involve risks, including the possibility of missed or late payments, which could harm your business credit score and restrict access to future funding. Always ensure you fully understand the terms and conditions of any loan or credit agreement before proceeding. If you encounter any repayment issues, don’t hesitate to contact us for assistance.