Bridging Loans – Important Information
As a borrower, you need to clearly understand and differentiate the advantages and disadvantages of bridging loans. Also marketed as caveat loans, it is very important for making the right choice from the very start.
Do you have a business that needs money quickly to finance a project or keep the operation going and you can’t wait long for it to be processed? Are you, for any reason, unable to approach a traditional bank lender? If the answers are ‘yes’, then you should consider a Basic Finance bridging loan. Our specialist bridging loan is a short-term loan that is efficiently processed and approved upon an applicant meeting the requirements needed to secure it. Even if you have bad credit, we have the skill and expertise to be able to find a way to assist you.
The following are the pros of bridging loans:
- It’s usually much easier and faster to obtain this type of loan than applying for a second mortgage
- The relatively simpler choice for a lender to approve and execute this type of transactions
- Legal documentation is simpler and more cost-effective
- Great financial instrument giving you the ability to borrow up to 90% of your property value
- With caveat in place, the borrower has greater power to prevent other loans to be paced and secured against the property by other parties.
However, there are some significant downsides:
- Inability to secure other loans, which require the property to be used as collateral
- Usually, it attracts higher setup costs and interest rate
- Relatively short-term life of this financial facility
- Higher default rates and discharge costs
If you believe you can fulfill the requirements for one of our bridging loans, get in touch with us today!