Bridging Loans

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Bridging loans are short-term financing solutions designed to "bridge" the gap between a current financial need and the availability of long-term funding or the sale of an existing asset. They are typically used to provide quick access to funds when immediate cash flow is required. Key features include:

• Purpose: Commonly used to finance the purchase of a new property before the sale of an existing property is completed, or to fund urgent business expenses while awaiting longer-term financing.
• Term Length: Usually 12 - 24 months depending on the lender's criteria.
• Interest Rates: Often higher than traditional loans due to the short-term nature and urgency of the financing.
• Interest: Interest can be retained, rolled up or serviced depending on your requirements and lender criteria.

Key Considerations:

• Collateral: Typically requires collateral, such as property or assets, to secure the loan. The value of the collateral often influences the loan terms and interest rates.
• Exit Strategy: Lenders require a clear exit strategy, such as the sale of a property or the securing of long-term financing, to ensure the loan can be repaid.
• Flexibility: Offers quick access to funds and flexible repayment options, making it suitable for time-sensitive transactions.

Examples of Use:

• Property Transactions: To purchase a new property before selling an existing one.
• Business Needs: To fund urgent business expenses or investments while awaiting long-term funding or asset sales.

Bridging loans are ideal for situations requiring immediate financial support with the expectation of securing more permanent funding or completing a sale in the near term.