GBL
Bridging
Bridging finance is usually a type of short-term loan. It’s best thought of as a temporary loan which gets you from A to B, until you can either clear the loan in full or secure a more permanent form of finance.
- Terms are typically 12 months or less. Terms can sometimes be longer on unregulated products
- Rates available in the market are from 0.4%. A typical rate is between 0.75% and 1% per month
- Payments can be made at exit or on a month to month basis. The preference generally is to retain the interest so its payable on the exit of the bridge
A bridging loan is often used for but not exhaustive:
- Buy a property at auction
- Purchase a new residential property while the existing one is still on the market
- Pay for renovation work
- Buy land for development
- Purchase an uninhabitable property
- Buy stock
- Pay for machinery or IT equipment