At Approved Finance, we take pride in our ability to assist clients in securing the funding they need, even when the circumstances are challenging. Our dedicated Property Finance team, led by Grace Rust and Kelly Moody, recently completed a £105,000 bridging loan for a client looking to purchase a property at auction.
This particular client had experienced some complications in the past that made securing finance more difficult. However, with determination and a tailored approach, our team worked closely with the client to understand their needs and financial situation. After a thorough search of the lending market, we found the ideal lender and secured the necessary funds to help them finalise the property purchase.
What is a Bridging Loan?
A bridging loan is a short-term finance option designed to 'bridge the gap' until longer-term financing can be arranged or the borrower can sell the asset. In property transactions, these loans are particularly useful for buyers looking to move quickly on a purchase, such as in auction scenarios, where completing the sale within a set timeframe is essential.
Unlike traditional mortgages, which can take several weeks or even months to arrange, bridging loans are typically processed and delivered in a much shorter time frame. This speed is one of the primary advantages of bridging finance, especially when time-sensitive opportunities arise.
How Was the Bridging Loan Used in This Case?
In this case, the client used the bridging loan to purchase a property at auction. Given the nature of auctions, where payments need to be made promptly after winning a bid, the client needed to act fast to secure the funds. Bridging finance allowed them to do exactly that.
The client's intention is to refurbish the property and then sell it on for a profit. This is a common strategy used in the property market, where investors buy undervalued or distressed properties, improve them, and sell them at a higher price. Bridging loans work perfectly for such short-term projects, as they provide the capital needed without committing to long-term repayment plans.
The Benefits of Bridging Loans
Speed: Bridging loans can be arranged quickly, which is vital for time-sensitive purchases like auction properties.
Flexibility: Borrowers can use bridging loans for a variety of purposes, including buying property, covering refurbishments, or addressing cash flow gaps.
Short-Term Solution: These loans are ideal for those who need immediate financing but are not ready to commit to a long-term mortgage. Borrowers can repay the loan once they've sold the property or arranged alternative finance.
Opportunity Maximisation: Bridging loans enable buyers to capitalise on immediate opportunities, such as below-market deals or properties sold at auction, where fast action is required.
Looking for Property Finance Solutions?
Whether you're in need of Commercial Mortgages, Development Finance, Bridging Loans, or Buy-to-Let options, our Property Finance team is here to help. With years of experience and a deep understanding of the property market, our specialists can find the right financial products for your needs.
Contact our team today at 01908 429888 or email us at info@approved-finance.co.uk to learn more. Alternatively, you can explore our comprehensive guide to bridging loans by clicking here.