Bridging Loans Growing in Appeal Across Multiple Areas

Bridging Loans Growing in Appeal Across Multiple Areas

It’s becoming clear that the rise and rise in bridging loan activity isn’t about to go into reverse anytime soon. 2016 brought about record growth for the industry, and this year is already off to a flying start. But what’s particularly interesting is the way in which key players are reporting not only a dramatic spike in overall interest in this kind of financing but also a dramatic change in the lenders and intended purposes of the loans being investigated and applied for.

So along with the usual commercial property development financing requirements, exactly which other areas are driving this enormous increase in overall bridging loan activity?

Domestic relocation

Well, firstly, there’s been a significant increase in the number of lenders opting for bridging loans as part of the everyday domestic relocation process. In so many instances, the delays involved while closing the sale of a currently owned property can make it difficult, or perhaps even impossible, to take advantage of outstanding purchase prospects, which may present themselves for a limited time only. In order to avoid missing out on such opportunities, many homebuyers are turning to affordable, short-term bridging loans as a means by which to purchase their dream properties while waiting for their own home’s sale to close.

Auction property sales

Likewise, outstanding opportunities often present themselves at property auctions, though meeting the payment requirements set out by those selling the properties can be difficult. Along with immediate deposits payable on the day, it is usually necessary to pay the entire balance within a matter of days, certainly no more than a couple of weeks. While conventional mortgage products are entirely unsuitable for such purposes, bridging loans are proving to be uniquely accessible and affordable for auction property purchases.

Renovation and extension

Across both domestic and commercial sectors alike, bridging loans can be uniquely convenient and beneficial when it comes to carrying out urgent building renovations, extensions, and other maintenance work. It could be that, for any number of reasons, such work is essential in order to close a sale or perhaps begin letting out the property to tenants. Where time is a factor and it is preferable to pay back the loan in a comparatively short period of time, bridging loans are proving to be incredibly versatile for urgent property work of all kinds.

Business shortfalls

Last but not least, it’s often the urgency with which the money is needed that makes bridging loans ideally suited to the needs of smaller to medium-sized businesses. From unexpected expenses to tax payments to temporary revenue shortfalls and so on, there are endless reasons why any business may need a quick yet relatively sizeable cash injection in order to prevent a potential disaster. When this occurs, working with a leading broker specialising in alternative financial products can help open the door to a variety of intelligent products and services. Gaining access to affordable and quickly available financing can often be a matter of life or death in the small business world, which is precisely why bridging loans are becoming assets of such extreme importance.