UK Bridging Loans - How to Make Money from Banking
By Joe Kocsis
The value of UK Bridging Loans for the property developer

Realizing the value of UK bridging loans to the property developer can be the difference between success and failure. Many property developers often look for the quickest way to buy property, make improvements and sell off at a profit and often find that capital is in short supply but quick profits could be made.

UK Bridging loans are loans are usually taken out to solve a temporary cash shortfall that may arise when buying a property or business, or perhaps paying for a renovation. A typical example of when you may need one would be if you want to buy a second property before you have sold your first, or you may need one if you are buying property at auction.

As a property developer you may need a substantial amount of money for a short period of time, normally 2-6 months. Specialist lenders will consider investment property proposals where there is an opportunity to add value above and beyond the initial purchase price by a combination of one or more of the following:

* Intensive management - improving the rental income stream by letting voids, reconfiguring accommodation and letting, progressing rent reviews, renegotiating leases, etc.

* By procurement of an alternative planning permission, effectively utilizing the running rental stream to buy time/service interest whilst the planning process is followed.

* By breaking up the constituent parts of the investment into elements to be traded and retained.

A commercial UK bridging loan can give you a stronger negotiating position when buying commercial property, enabling you to buy a property without a contingency on the sale of your existing property or other assets. Often a bridging loan from 5,000 - 5 million on a first or second charge basis can be arranged.

As UK bridging loans are more risky for the lender than the usual house buyer loan, bridging loans are therefore more expensive and should only be used where you are fairly certain to repay them within about 6 months.

Fast bridging loans are available for commercial
reasons such as investment and owner occupied properties, including a commercial bridging loans for:

* Office complex
* Industrial
* Leisure facilities
* Retail & licensed premises
* Professional practices
* Commercial & residential development
* Buying property at an auction

How long do fast bridging loans take?
You should expect the entire process to take 5 to 10 days - i.e. from your first application to the money being paid over to you.

It could be done quicker. It depends on how fast you want to move and if there aren't any significant hiccups. Based on my research, interest rates can vary enormously dependant upon the lender used and the best loan to value is between 70% - 85% LTV.

* Completion possible within a minimum of 5 days.
* Fast efficient professional service.
* Funds available for any purpose.

UK Bridging loans are generally secured on property or other assets of high value - meaning that the value of your asset is used to guarantee your loan.

Payments are interest only, so your monthly repayments are lower as you are not paying back any of the bridging loan principal. As bridging loans are short-term loans, the interest rate will tend to be higher than that of, say, a mortgage, making bridging loans unsuitable for long term financing, but highly useful and profitable for when you need funds fast.

Adverse Credit History?
Bridging Loans are also available to the people that have found it more difficult to get mortgages. This enables these people to build a track record before applying for the conventional mortgage.

As the loans are secured on property, they can be effectively used to raise capital for any purpose, regardless of your credit history. Normally bridging loan brokers can help with IVA, IVA'S, BANKRUPT, BANKRUPT'S, CCJ, CCJ'S, ARREARS, DEFAULTS, MISSED MORTGAGE PAYMENTS.

Property developers can be assured that if they need the money fast, they can rely on a UK bridging loan to come to their rescue whatever their circumstances.
The author has over twenty years of experience in the UK Financial Services Industry.