16 December 2024 | Written by Shideh Mirashrafi
How bridging offers flexibility
Bridging loans are a short-term financing option, designed to "bridge" the gap between a financial need whilst long-term finance is being arranged. They are particularly useful in scenarios where timing is crucial, such as purchasing a new property before selling an existing one, funding renovation projects, or dealing with urgent cash flow issues.
In this guide, we discuss how bridging loans offer flexibility:
Quick access to funds
One of the most significant advantages of bridging loans is the speed at which they can be arranged. Traditional loans often involve lengthy approval processes, but bridging loans can be secured in as little as a few days. This quick access to funds provides flexibility for individuals or businesses who need to act fast, such as purchasing a property at auction or for where cash is needed urgently.
No monthly repayment may be possible
Bridging loans can be borrowed on a ‘serviced’ or ‘rolled’ basis. A serviced bridge is where the interest is paid monthly whereas a ‘rolled’ bridge has the interest rolled up to be paid at the end of the loan term. A rolled bridge can be useful for customers needing to complete a costly project and would benefit keeping the costs down until the project is completed.
Flexible repayment terms
Bridging loans typically offer flexible repayment options. You can choose to repay the loan in full once your longer-term financing is in place or once the property sale is completed.
No Early Repayment Penalties
Many bridging loan providers do not charge penalties for early repayment. This is particularly beneficial if the borrower’s circumstances change and they can repay the loan sooner than expected. This flexibility reduces the overall cost of borrowing and allows the borrower to clear the debt as soon as possible without incurring additional fees.
Our bridging loans start from £25,000 up to £500,000 with no early repayment charges. Having no early repayment charge gives borrowers the financial freedom they need to settle their debt on their own terms, aligning with their budget and financial goals.
Bridging loans can be used for different purposes
Bridging loans are not restricted to a specific type of purpose. While they are commonly used for property transactions, they can also be used for a wide range of purposes. For example, funding business ventures, paying unexpected tax bills, or dealing with other short-term cash flow issues. This flexibility of bridging loans makes it a good financial option for borrowers with different needs.
Summary
Bridging loans offer a level of flexibility with quick access to funds, versatile uses and flexible repayment terms. They provide a solution for individuals and businesses in need of immediate, short-term financial support. Whether you’re navigating a property purchase, funding a project, or managing cash flow, bridging loans can offer the flexibility you need to achieve your objectives.
At Mercantile Trust, we take an open-minded approach when reviewing our applications. We apply a human approach to underwriting, we do not rely on credit scoring, and each application is assessed on its own individual merit.
Call our free number on 0800 032 3737 to speak to one of our experienced advisors. They will be able to help you get the loan you need. It is possible for you to receive your funds in just 48 hours.
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