| By definition, Bridging Finance or Bridging | | | | will need to make sense for your business. |
| Loan is a short-term loan used to purchase | | | | |
| commercial property. This is something that | | | | If you feel taking on this type of loan is |
| can come in very handy, depending on your | | | | the right thing to do, you will be far better |
| particular situation. There are two main | | | | off going through a specialist Commercial |
| points that you need to consider before you | | | | Lender. |
| opt for a Bridging Finance package, your | | | | |
| needs and the state of the property market. | | | | They will shorten the entire process as a |
| | | | specialist will know the market and they can |
| One of the major benefits of Bridging Finance | | | | quickly make a judgment on the best loan for |
| is that it will allow you to close on a | | | | you, based on your particular circumstances. |
| property and purchase a new property before | | | | Be sure to check that the loan can be |
| you sell your existing one. You will need to | | | | converted into a conventional Commercial |
| evaluate your current situation to determine | | | | Finance package. You will also want to check |
| if your needs justify taking on this type of | | | | on the type of interest rate and the costs |
| finance. Will you lose the new property if | | | | you will entail if you do have to convert. |
| you can't offer a deposit? Would you be | | | | |
| eligible for a discount on the purchase price | | | | Most Commercial Lenders will be willing to |
| if you can come up with the cash fast? | | | | extend the terms of your Bridging Finance |
| | | | package. Let's say, for example, you have a |
| What are the existing market conditions in | | | | buyer and you are waiting for the sale to |
| regard to the sale of your existing property? | | | | close. Bridging Finance in general is much |
| Is it going to be possible to sell your | | | | more flexible and accommodating than you |
| existing property in the time frame set out | | | | might expect in this respect. |
| in your finance package? Most Bridging | | | | |
| Finance typically runs for one year and will | | | | Paying back your Bridging Loan at the end of |
| need to be paid in full at the end of the | | | | the loan term more often than not depends on |
| term unless it is possible to convert it into | | | | your ability to sell your existing property. |
| a Commercial Loan. You will also need to be | | | | If it does not sell in the required time, you |
| aware that the interest rates will be higher | | | | will be paying the existing loan on your |
| on a Bridging Finance package. | | | | current property, your new property and the |
| | | | newly converted Bridge Finance as well. |
| If the market is slow and you do not have an | | | | |
| urgent need for the new property, it may not | | | | If you believe this may be a possibility be |
| be in the best interest of your business to | | | | sure to take a package that can be converted |
| take on this type of loan. On the other hand | | | | to a Commercial Loan if the need arises. |
| if the property market conditions are good, | | | | Otherwise you may have to come up with the |
| you can be out from under a Bridging Loan | | | | full Loan sum at the end of the finance term. |
| fast. However, it is still something that | | | | |