Bridging doesn’t have to be complicated
Bridging or Short Term Property Finance has been around for years. It is not a new concept albeit has come more to the forefront over recent years as more lenders have entered the market and competition, together with product diversification, has made Bridging more mainstream.
Bridging finance, typically being loans secured on property assets with a term of up to 12 months, can provide a solution to a problem e.g. raising money for a tax bill or an injection of urgent cash into a business, but more commonly is provided to help a borrower capitalise on an opportunity.
By its nature, Bridging provides quicker access to cash than typical bank lending and can often put the borrower in the same position as a cash buyer to secure a good deal or enables an asset to be repositioned, and value added through refurbishment/re-development, re-letting or through changes to planning. Such deals by their nature fall outside typical lenders’ criteria on day 1 or completion deadlines simply do not allow for usual high street bank timescales.
The challenge for borrowers can often be finding the right lender amid ‘headline’ rates and criteria, and being confident in delivery when quick decisions and a straightforward approach are critical to securing or losing a deal.
As MD of Cowgills’ sister bridging business, PMJ Capital Ltd, I have seen all types of transactions and equally understand the concerns of borrowers so thought I would share my tips below:
- Choose your lender carefully, be certain that you are dealing with a principal lender and understand who is making the decisions
- Focus on ability to deliver as opposed to just price
- Be clear on your requirements and provide full details on the transaction including experience to enable an informed decision to be made
- Know your exit/repayment strategy and that this is deliverable within the loan period
- Choose a solicitor who has experience of bridging lending and understands the deal timescales
- Keep the lender informed and be on top of information requests throughout the deal process
Tick these boxes and your journey is more likely to be smooth rather than stressful.
David Rainford is Property Finance Director at Cowgills and MD of PMJ Capital Ltd which is a principal lender providing 1st charge bridging, development and refurbishment funding. Contact Dave on 07794490682 / firstname.lastname@example.org or Lee Barton on 07534 365599 / email@example.com
The information was correct at time of publishing but may now be out of date.