If your line of work involves property acquisition and development, then you know how important speed is within this industry. A good deal may come out of the blue, but it can disappear just as quickly. As such, to be successful in this profession, you need to be able to react as fast as possible when an excellent deal presents itself.
So, to be able to act on a good deal, you need to access quick financing. Without it, you will find yourself kissing goodbye a lot of great business opportunities. Luckily, bridging finance can provide you with the quick funds you require to make sure you do not miss out on that deal that’s going to bring you a lot of income.
What is Bridging Finance/Loans
Bridging loan or finance is a short-term loan, between 2 weeks and 12 months and is secured on land or property. Such loans are used to “bridge” a gap between debt coming due and the main line of credit that will be available. They are usually used to resolve pressing matters.
Surprisingly, bridging finance is a simple and straightforward process. The financing you get is based on the value of the property you own. Bridging loans are not only fast, but they can be very flexible. In terms of repayment and interest rates, you’ll be able to choose what will work best for your situation. Since bridging finance can be secured fast and with favourable terms, it has become a popular option among property specialists.
One of the best things about these loans is that you have control over the broker you choose. Since you are not tied to a particular institution, you can freely explore your options and locate the broker that will offer the best deal. Since most firms know that they have to compete, you will usually have the leverage to secure the terms that are ideal for your business.
The amount you can get from a bridging loan is usually based on the value of your property or properties. However, that does not mean that the figures are set in stone. There’s plenty of room to negotiate. As a matter of fact, different brokers have varying techniques for assigning a value to your property. Some prefer to utilise an Open Market Value while others stick to the Restricted Sale Value. If you’re able to get a substantially favourable valuation with any of the methods, you’ll be able to shop around for brokers that are comfortable with that valuation technique.
Once you identify which bridging loan broker you wish to work with, you will then be able to lay down the specific terms of your arrangement. You will not only be able to negotiate the valuations as well as the amount you want, but also the repayment terms and the interest rate for your financing. Since your situation will present specific needs, you can ensure that they are met. Taking advantage of bridging finance will not only allow you to control the terms of your financing, but you will be able to secure the loan in a short period.