A Bridging Loan is usually a type of Short-Term Loan. Its best thought of as a temporary Loan which will get you from A to B, until you can either clear the loan in full or secure a more permanent form of finance.
That’s where the “bridge” idea comes in, to get you from one stage to another. It can take weeks for some lenders to complete a Short-Term Loan. A Bridging Loan can be ready in 24 – 48 hours.
a fast Bridging Loan can provide borrowers with access to capital much quicker than normal and with a minimum amount of red tape
A Bridging Loan is essentially a Short-Term Loan that is often arranged within a short timeframe and maybe to an individual or company and secured against residential or commercial property. The defining characteristic is that it is a loan that bridges the gap to an exit, which is usually a refinance or sale of the asset. For businesses, bridging finance is generally used when a company requires additional funds to help boost its cash flow for acquisition purposes.
Bridging Loans for property can be used to break the property chains and provide a Short-Term finance solution where there is a delay between the completion dates. Another typical reason why Bridging Loans are used, is when properties are purchased at auction. Developers and landlords can use a Bridging Loan for development or renovation purposes. In most cases, you may need finance fast in order to move quickly and capitalise on a particular opportunity.