You have weighed up your options, discussed the type of borrowing that best suits your circumstances, had your bridging loan questions answered and applied for finance – what happens next?
Essentially, your first step is to spend the cash you have obtained! It is likely that you knew what you needed it for before applying for the loan and now you will be able to use it.
There are many things that bridging loans can be spent on. In fact, the options are almost limitless.
However, perhaps one of the most common reasons why people borrow this type of product is when they are in the middle of buying a property. If you have found the house or flat of your dreams and have had your offer accepted then you are certain to be unwilling to let anything stand in your way of moving in.
But if you have your own property to sell and something causes a delay in this part of the chain then it may mean that your ideal future home slips from your grasp.
By applying to bridging loan companies for help, you could raise the capital you require to secure the residence you have your eye on, giving you peace of mind as you sit back and wait for your sale to go through.
And there are many more reasons why you could find this type of loan useful. For example, you could use it to prevent your home from being repossessed by using the cash to pay off your creditors.
Alternatively you might utilise it to clear any outstanding debts you have, buy a new car or pay a large bill you had not been expecting – the choice is yours.
Now you have received your loan and spent it on what was necessary, you can begin to pay it back.
One of the great things about some bridging loans is that legal, administration and valuation fees will be added along with the interest to the sum you pay back, meaning that you do not have to worry about juggling several outgoings.
While this type of loan was designed for emergencies when you need cash quickly, the interest rate can start from as little as 1.25 per cent each month – so it may work out at a lot less than you were expecting.
Another great advantage is that some providers offer you the chance to repay the debt early, which is a real bonus if you want to get back into the black as fast as possible.
Bridging loans will typically be offered on a one-month to one-year term, so you can decide exactly how long you need to repay the debt.
And if you already have a mortgage, don't worry as the loan provider will simply register the charge behind the lender.
You could even choose to have your bridging loan converted into a second mortgage once you have bought your property should you wish, making the repayments even more manageable.
If you need to, you can also take a payment holiday or enjoy deferred interest payments, which could help to make your life even easier.
The money you have borrowed can be paid back quickly through the sale of your property or your new mortgage, or you could clear the balance in the same way you would any other mid-sized loan.
So why not treat yourself to a little peace of mind and speak to a bridging loan provider?
Raising the money you need to start a business can be hard, however, there are alternatives to bank loans. Among them are bridging loans, peer-to-peer lending and borrowing money from friends and family, meaning you need to do plenty of research.
Before taking out a bridging loan, you must understand a number of key points. These include the rate of interest you will be charged, the length of time you have to repay the loan and whether there are any arrangement fees that apply.
You should only consider bridging finance if your funding needs are temporary. This is because the high rates of interest make bridging finance unsuitable as a long-term solution, so if you have long-term needs, you should look at other options.
Both banks and specialist bridging loan companies can provide the bridging finance you need, meaning you need to compare products from a range of providers. You need to look at factors such as interest rates and arrangement fees.
Some bridging loan companies will lend up to £5 million if you have sufficient equity in your home, however, what if your borrowing needs are more modest? If you need a sum of £10,000, bridging loans can still be an option.
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