11 questions to ask your bridging finance broker

The bridging finance world has grown exponentially since the credit crunch. In 2015, bridging finance (which was originally intended as a gap-filler) accounted for around 2% of the UK’s mortgage market lending, so we’re here to answer any bridging finance questions you may have.

If you’re a property developer or have a business need, you can quickly forward finance to your next project with a bridge loan. You no longer have to wait for your existing development to sell to move onto your new development or property, hence bridging has become so popular and indeed has spawned many success stories.

If you still aren’t fully up to date with this comparatively new industry, which many people are not, we have compiled a list of bridging finance questions you should your broker about when considering your bridging finance solutions all answered by an expert Enness Bridging finance broker.

1. What, actually, is a bridging loan?

A bridging loan is a short-term loan secured against an asset, typically Real Estate. It is not a normal residential loan as the repayment terms are shorter and is supposed to form a stop-gap where finance is needed. Interest rates are higher than more traditional finance products by virtue of the speed at which they are arranged, the risk the lender takes and the short term nature of this loan.

2. Does my exit strategy differ from a normal loan?

In short no. Like any loan, it is crucial you have a planned exit in place before you proceed with your bridging finance. Only in bridging finance, it is perhaps more crucial as the time frame of the loan is so much smaller than a normal residential loan.

Enness brokers have a wealth of experience in advising clients on their best exit strategy with regards to bridging loans and are always on hand to find the best solution for you.

3. Does the broker need any more information than usual?

Essentially no, but we just need details.

  • Asset(s) used as security
  • What the funds will be used for
  • The exit
  • Assets & liabilities

The more information we have, the better the rates will be.

4. I’ve heard that bridging loans are really expensive?

Not at Enness. Due to our unusually large network of lenders, we have access to bridging rates which are as cheap as residential mortgage rates.

5. Is Bridging finance honestly THAT quick?

If everything is in place properly, we can acquire a bridging loan for clients within a couple of hours, giving you the access to finance you need to complete your purchase.

6. But how long can I borrow for?

The usual term is 12 months. However, due to our industry connections we can usually extend this to 18-24 months. There is no minimum term for a bridging loan, but we do advise clients to be aware of their exit fees.

7. Do I need a solicitor?

Yes. As with all mortgages, a position of dual representation is adopted meaning there is one lawyer acting for you and one acting for the bank. This gives everyone involved peace of mind.

Our network of industry partners means that we can advise on the correct solicitor to facilitate your unique needs at Enness.

8. I have no evidence of income; will I be able to get a bridging loan?

Yes. Our relationships with lenders mean we are able to negotiate with lenders on a case by case basis and present your assets and capital in an easily digestible way which is most beneficial for everyone.

9. I’m over 65, can I still get a bridging loan?

Fortunately, there is no age limit on bridging, so yes, the over 60s can and do often get bridging loan.

10. I’m from overseas, will this be a problem?

Though there are some nationalities that present more challenges than others, at Enness we pride ourselves on solving even the most complex of cases, so rest assured that a solution can be found for your bridging finance questions.

11. Do bridging lenders have a rigid set of lending criteria?

Yes, but if your brokers good enough then anything can happen.

Whether searching for high value bridging loans or commercial bridging finance, our expert brokers have the right bridging solution for you, we hope we have answered your bridging finance questions and if we have not, please do not hesitate to get in touch.

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