Bridging finance and bridging loans are one of the most popular short term finance products on the market, and there’s a good reason for that – they’re one of the fastest types of loan to arrange.
Bridging loans are also incredibly versatile and flexible, able to be used for almost anything as long as you meet the criteria. They can be taken out over a very short time, or they can be stretched over a relatively long period, should you need it.
Many of our clients use bridging loans for property projects, however, they can also be used for things like invoice financing or stopping a bankruptcy petition, should you need it for that.
One of the most frequent questions we get about bridging loans, is how long does it take to get a bridging loan for a client, so we’ve put together a short guide for you.
How fast can I get a bridging loan?
This will largely depend on your circumstances, however, we can usually get an indicative agreement in principle within an hour, with finance terms in about 4 hours.
Now that being said, there will be many who claim that they can get a bridging loan agreed and paid out within 24 hours but this is a pretty unrealistic time scale and usually takes between 5 and 10 days, and often between 7 and 14 days to get the loan agreed in principle, get the paperwork settled, and the loan paid out.
If you’re expecting to have the funds in your account within a day or 2 then that’s not a realistic time scale and you’re probably better expecting around a week.
How long does it take to get the loan approved by a lend6er?
In principle we can usually get an agreement within a few hours for a bridging loan, however, that’s just in principle and will then be subject to things like checking your income, checking your identification and checking your credit report.
If we class approval for a bridging loan as ‘in principle, then it’s a few hours, but if we’re classing approval as an agreement and terms agreed, then expect it to be more like 5 days.
What issues might cause a delay?
Again, this will largely depend on circumstances, however, we can give you a few typical examples of things that can delay applications for bridging loans.
One of the delays that clients experience is that, generally speaking, the cheapest rates will be offered by bridging loan providers that are more rigorous with their checks and criteria. So, if you’re looking for the best or cheapest rate then it’s likely that approval will take longer because the provider will want to assess your risk in detail. If you’re happy to pay more in interest then the process from application to completion will be less, but that tends to be the pay off.
Generally speaking, to get the best rates you’ll need to complete legal searches and valuation reports. Depending on your circumstances, these can take up to a week or two, and if you’re looking to reduce that time then you’ll pay more in interest on your bridging loan.
Is it right for me?
We have a team of loan brokers that will always take your circumstances into consideration and give you honest advice.
What we would say is that commercial bridging loans and bridging finance is designed to be short term, and shouldn’t be used as a way to replace, for example, a mortgage or longer term business loan.
Use our bridging finance calculator
To make it easier for you to know what you could be paying for a loan we’ve put together a bridging loan calculator so that you can get a better picture of what it may cost, and what interest you may pay, and under what terms.
There are a few fields that you can edit and change around so that you can try out a few different scenarios and situations to see if a loan of this type is right for you.
How long are bridging loans?
Generally speaking, you’ll find that bridging loans tend to be taken out over an average of 6 or 7 months, however, they can be agreed from 1 month all the way up to 24 or 36 months depending on your circumstances.
The length of the loan will tend to be more related to your situation and your circumstances rather than anything else, but we’ll always provide you with honest and sensible advice on your loan.
Do you need a survey for a bridging loan?
Revisiting a point made earlier, most lenders that offer the best loan rates will expect you to undertake some kind of value survey.
It won’t be the case with every provider, however, expect that lenders providing the best rates and terms will have the most stringent criteria for lending which means they will do.
If you don’t want to do a survey, that’s not always a problem but it means that your lender can’t be certain about your risk profile and will charge you accordingly in interest.
What information should I provide a broker to speed up the process?
In terms of what you can do to help speed the process up, it always helps to have the relevant loan paperwork ready and waiting to go as and when the lender requires it.
Although not an exhaustive list, it’s always handy to have all your ID documentation to hand such as passports, proof of address, utility bills, etc. Secondary to that proof of income always helps, as well as providing a copy of your exit strategy, or if you’d rather your business plan so that the lender knows how and when you intend to repay your loan.
How to get the perfect bridge finance solicitor
Because bridging finance tends to be quite a specialist type of lending and finance it helps to have a solicitor who has experience in dealing with bridging loans too.
Aside from outright asking your solicitor if they’ve got the experience in arranging these types of loans, perhaps it’s an idea to also search out a specialist solicitor in this area, either through recommendation or through an online search. It’s probably also an idea to set out your expectations early, such as how quickly you’d like the loan arranged, and how you’d like to be prioritised in their workload.
Summary
Bridging finance is an ideal way to plug a shorter term gap if you require quick funding. It can be used in property as well as a number of other sectors to help where you may require it.
That being said bridging is a relatively quick way of acquiring finance. It can be as quick as you want it to be, relatively speaking, if you meet the criteria and have relevant paperwork. How quick you want the loan agreed will also come down to whether you’re happy to wait for surveys and other checks that may delay an agreement.
If you want the best rates then you will likely need to wait a little longer for this so that a lender can confirm your risk status, and if you’ve rather have a quicker agreement then you’ll need to prepare to pay a bit more in interest.
