FAQ’S - Questions & Answers About UK Bridging Loans
Who qualifies for a bridging loan?
In an ideal world everyone would have an excellent credit rating. However, where banks only tend to cater to those with cash resources or assets, we also consider people who fall outside of this standard set of criteria – which means we will also look at cases with a reduced credit rating or where there is no regular income.
Why do bridging loan lenders consider people that banks and similar financial institutions don’t?
Because a bridging loan is a short-term loan designed to help people with temporary liquidity shortfalls and its payment terms can be established in mutual agreement between lender and borrower.
Ours is a specialised niche segment within the financial sector that helps improve liquidity when it is needed most and reduces the number of foreclosures. As such, and in helping smaller scale investors realise their projects, it fulfils an important role within the economy. The increased risk is reflected in the interest rates, but bridging loan providers are there to help when no-one else does.
How much will you lend in relation to the value of the security?
We can lend up to 75% of the value of the asset you provide as collateral, though the exact percentage varies from case to case.
What kind of security is needed?
Assets such as properties, commercial premises, mixed-use developments and building plots. We are lenders with a social conscience, however, so we will not accept your family home as security.
How do I repay the loan?
• Through the sale of a property, investment or other asset
• The proceeds of investments, business ventures or business revenue
• Refinancing on to a traditional long-term loan or commercial or BTL mortgage
• Funds from a pension fund, divorce or inheritance
What if I struggle to pay back the loan at the end of the term?
We work with you from the start to help ensure your venture is successful, but if you need more time we will review the situation together and in the vast majority of cases offer a loan extension. It is only if you repeatedly miss the extension deadline that your security could be at risk, but this is a last resort and we will always rather work together to establish a feasible payment plan.
Am I charged extra if I service the loan before the full agreed term?
We don’t charge you penalties for paying the loan off early, though you will still have to pay the full amount of interest, as stipulated in the loan agreement.
How long does an application procedure for a bridging loan take?
We work hard to ensure that you have a definitive answer within a couple of days. However, the legal due diligence process can take a bit longer, so if time is of the essence we will do everything in our power to help the process along to meet your timescale.
How soon can I receive the money?
Once approved, you should under normal circumstances receive the funds within one week of the paperwork being completed.
Are there any initial costs?
Under normal circumstances there are no upfront costs until such time as you proceed with the loan, when you may have to pay for documentation such as a valuation report, if you don’t already have one.
Can I request additional funds when the loan has become active?
If your security can cover it and you haven’t defaulted on your initial bridging loan agreement this is certainly possible.
Is my personal information treated with confidentiality?
Bridge Help takes your privacy and all the laws pertaining to it very seriously, and as a result we not only will never pass your details on to third parties for marketing purposes but also apply all the required security procedures enshrined in the law.