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Bridging Finance Is Gaining Popularity
The Association of Short Term Lenders has just released a report which shows a sustained upward trend in the number of bridging loans issued in the last quarter.
In the period leading up to 31 March 2016, ASTL members provided their clients over £2.7 billion in bridging finance products and this amount is expected to increase again in the coming months. In terms of percentages, this represents a 16% rise in the amount borrowed compared to the period ending 31 March 2015.
According to the Brenson Hersch, ASTL chief executive, bridging finance is now a highly established niche product which is going from strength to strength – even though the economy itself is still providing cause for concern for many business owners. The main reason for this is the high level of uncertainty following the results of the referendum in June – the effects of which have yet to be seen in the market place.
To quote Mr Hersch, “As applications begin to pick up over the next quarter, despite some negative factors, the need for bridging finance is likely to continue to grow and our members are well placed to take advantage of opportunities.”
As an added boost to the bridging loan industry, the actual value of bridging loan applications has also increased from the previous year by just over a fifth. However, the overall value of the loan book has experienced a small dip of around 4% when looking at annual trends. This provides a good indication that the loans themselves are being paid off at a higher rate.
With more and more banks and other high street lenders tightening up their borrowing requirements, it seems that bridging loans are gaining serious ground as a genuine way forward for those in search short term finance as a means of providing growth.
Unlike traditional mortgage products and most other loan types, bridging finance is much more flexible and widely available. Bridging loans can even be sourced for clients who have experienced bad credit problems and for those who are unable to provide proof of income.