With the support of an experienced broker, organising a bridging loan in Northern Ireland can be fairly straightforward. Even so, you still need to understand the eligibility criteria that apply to bridging finance in general before submitting an application for a Northern Ireland bridging loan.
What is a bridge loan?
A bridging loan is a specialist short-term secured loan that can be organised and accessed much faster than any comparable high-street loan. As the name suggests, bridging finance is used to “bridge” a temporary financial gap and is typically repaid within a period of one to 12 months.
With all the essential paperwork in place, a bridging loan can be authorised in as little as a few working days. This makes it an ideal facility for time-critical purchases and investment opportunities, such as purchasing properties at auction.
Bridging finance is a popular tool for property developers and investors looking to fund short-term projects as affordable as possible. With monthly interest as low as 0.5% (sometimes less), bridging finance can be hugely cost-effective when repaid promptly.
There are also no limitations placed on how much can be borrowed (based on the value of the assets used as security for the loan) or how the funds can be allocated after being received.
What are the main eligibility criteria for Northern Ireland bridging loans?
Eligibility for bridging finance is established on the basis of two main criteria:
- Security: The applicant must be able to provide assets of value to cover the costs of the loan in the form of viable security. This usually takes the form of their home or business property they own but can also be other assets of value like business equipment, vehicles, jewellery, and so on.
- Exit strategy: This refers to a workable and reliable plan for repaying the loan. Bridging finance is repaid by way of a single lump-sum payment at a later date, complete with interest and fees. The applicant must provide evidence that they have a robust exit strategy in place, such as the sale of a property or an owed inheritance payment.
Other than this, the qualification criteria for bridging finance are fairly relaxed. You do not need to provide formal proof of income, nor is your employment status of any major relevance.
It is even possible to qualify for bridging finance with poor credit or a history of bankruptcy. All that matters to the lender is your capacity to repay the loan in full and on time, along with the provision of security as an ‘insurance policy’ against non-payment.
What can I use a bridging loan for?
If you qualify for a bridging loan, you can use the funds for any legal purpose whatsoever. Just a few of the more popular applications for bridging loans include business financing, property investments, development financing, land purchases, auction property purchases, home improvements, property conversions, and more.
Irrespective of your requirements, it is important to ensure that you shop around to get the best possible deal on your bridging loan. This is especially true if you have any past credit issues, which may affect the competitiveness of the deal you are offered. At UK Property Finance, we work with an extensive panel of more than 300 lenders to source high-quality, low-cost bridging loans for all purposes. For more information on the criteria for bridging loans in Northern Ireland or to discuss your requirements in more detail, call anytime for an obligation-free consultation.