Bridging loan arranged in eight days saves property deal
One use for bridging loans is when mortgage funds are taking too long before being available. A recent case demonstrates how bridging finance can save a time-sensitive deal.
An asset management company owned three offices in a business park and wanted to purchase another three units in the same location. To secure the units, the business paid a £160,000 deposit. The seller imposed a sale completion deadline, but the company’s bank said that they could not process a commercial mortgage application that quickly.
The company director approached a bridging finance broker who arranged bridging finance. A 12-month bridging loan of £1.14 million was provided within eight days. This met the seller’s deadline and secured the purchase of the three units.
To complete a bridging loan that fast requires a high level of cooperation between all the parties involved to make sure that the process goes smoothly. The valuation report was produced within five days, and the legal work completed in just over a week.
Not every bridging lender can provide loan funds within eight days or less. A bridging broker will have knowledge of lenders that can be relied on to provide a fast service for time-sensitive deals. A broker can advise borrowers what documents they will need to provide to the lender so that delays are not caused by submitting incorrect documents.
For deals that are not time sensitive bridging loans usually take longer than eight days but can be quicker than commercial or residential mortgages.