4 days to complete a bridging loan | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 04/12/2020

Bridging loans are there to help businesses finance opportunities such as property investment and property development fast. Alternative Bridging Corporation has released details of a bridging loan they completed in just four days from receiving the initial application.


The latest Bridging Trends data for Q3 2020 shows that the number of bridging loan applications increased by 46%. This is potentially a result of pent up demand following the first national lockdown. The affect of this has been an increase in the average number of days taken to complete a bridging loan, which is now up from 50 during Q2 2020 to 52 in Q3 2020. This is also an increase on the same quarter in 2018 and 2019.


However, lenders are responding and it is still possible to get bridging loans with a fast turnround, especially if brokers compile all the required documentation up front. Jonathan Rubins, director at Alternative Bridging Corporation says:
“There is a lot of talk at the moment about the average completion time for bridging finance creeping upwards, but it’s important to remember that if you partner with the right lender and have your ducks in a row, bridging can still be arranged in a handful of days.”


The case that Alternative Bridging Corporation completed in a matter of days was a £250,000 loan to refurbish a shop and the two flats above. The North London property was valued at £420,000. The legal work and valuation were provided upfront helping to get the money quickly to the borrower that needed this to pay the builders to complete the project.


Jonathan Rubins continues:
“The borrower had actually been introduced to us by an existing customer of Alternative Bridging who had recommended us for our speed of service. We needed to move quickly to deliver the funds within a tight timeframe and we were supported in this by the fact that the borrower had already instructed their lawyers to provide a complete pack and the valuer was provided with all the necessary information upfront.
“The result of good preparation and working with Alternative Bridging was that the customer was able to access the funding required to complete the refurbishment work in just four days. We are always happy to work with brokers and customers on cases like this. And we will always go the extra mile to deliver the improbable.”

What can you use a bridging loan for?

According to Bridging Trends, the most common reason for businesses to use a bridging loan was to purchase a property for investment purposes at 22% of all completions during Q3. The remaining reasons included:
  • Regulated refinance – 17%
  • In order to break a chain – 17%
  • Refurbishment of heavy industrial properties – 13%
  • For business purposes – 10%
  • To purchase at auction – 7%
  • Unregulated refinance – 5%
  • Other – 1%

 

New range of bridging loans from Ultimate Finance

Ultimate Finance has recently announced a revamped range of bridging loans aimed to help support property developers and investors as access to the Coronavirus Business Interruption Loans Scheme (CBILS) comes to a close at the end of January 2021. 
The revamp includes reduced rates across the product range and a return to lending at 75% loan-to-value. This will be important to many businesses as the proportion of borrowing to property value has increased for bridging loans in Q3 2020 reaching 51.7% LTV compared to 48.8% LTV last year.
The Ultimate Finance bridging range includes the following options to help borrowers:
  • To purchase a property
  • To fund the development of a property where the expectation is to sell this once complete
  • To fund the finishing of a property development where the expectation is to sell this once complete
  • To refurbish of a property
  • To refinance existing loans including bridging loans
Liam Cavanagh, Head of Bridging Finance at Ultimate Finance, says “The property financing market remains constrained and we’re committed to using our Bridging Finance to fill the gap and make up for reduced lending appetite elsewhere through the quick provision of funding.
Our new equity release offering is specifically designed to help developers or landlords nearing completion on projects, to release capital tied up in the project and purchase their next property, which is not readily available in the market right now.”
The new range is only available through business bridging loans brokers. 

 

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