Bridging lender who wants to become banks could slow down loan process
Some small bridging finance lenders are applying for banking licences and this could slow down the bridging loan application process.
To be able to lend money, bridging lenders need to have a means to raise funds. It costs money to raise funds, which is why some lenders are applying for banking licences, which will give them access to funds at lower cost. Until they have been granted a licence to operate as a bank, many lenders are funded by banks. Banking involves a lot of bureaucracy and this can slow down the process of raising funds. This may result in delays in the loan application process for borrowers who use a bank or the non-bank lender raises money from a bank.
Bridging loans are seen as fast loans, but the reality is that in 2017, the average time it took to complete a bridging loan was 43 days.
The good news is that there are many alternative lenders who can complete loans much quicker. If a borrower wants to raise funds sooner, it can be done in much less than 43 days. In exceptional circumstances, it is possible to complete a bridging loan within a day or two.
If a loan is for a time-sensitive deal, a bridging finance broker will know which lenders can complete the deal quickly. The broker can work with the lender and the legal team to make sure that there are no delays in having funds ready.