At Arco Commercial Finance, we can offer a bespoke UK bridging loans package, suitable for when your client requires funds quickly and on a short-term basis (i.e. 1 – 18 months).
A bridging loan is a short term secured lending facility, secured against property (or land), and is used to ‘bridge’ the financial gap, until longer-term finance can be arranged. UK bridging loans are used to resolve a temporary cash flow problem or to meet tight deadlines
Arco Commercial Finance UK bridging loans can assist clients in many ways, but the main purposes are;
• Broken Chain – Either you have not yet sold your existing property, or perhaps the chain has broken down and you have lost your potential buyer. Instead of waiting until you have resold your existing property and risk losing the new home, UK bridging loans can be arranged to ‘bridge’ this gap and enable you to complete on the new purchase, repaying the bridging loan when your existing property sells.
• Below Market Value Purchase (Discounted Purchase) – A UK bridging loan can be used on a property that is being offered with a discount from its Open Market Value (OMV). UK Bridging loans will be based on the OMV rather than the actual purchase price, meaning a smaller deposit is required.
• Auction Purchase – When a property is purchased at auction, there are usually strict completion deadlines of 28 days, with a 10% deposit being paid on the day of the auction. UK bridging loans can be arranged quickly (usually within 7 – 10 working days, but in certain circumstances we have completed in 48 hours), to enable you to complete on time. A conventional mortgage can then be obtained in order to refinance and repay the bridging loan.
• Retention (Property Needs Work) – If your property needs repair work in order to make it habitable, a bridging loan is a viable option as a conventional mortgage lender will not lend until the works have been completed (called a retention). Once the work is complete, the property can either be refinanced to a conventional mortgage or sold, to repay the bridging loan.
We can arrange UK bridging loans from 0.69% – 2.0% per month (depending on the loan to value and security).
For UK bridging loans, the lender is likely to charge a valuation fee and legal fees upfront. Most lenders will also charge an arrangement fee of somewhere between 1 – 3% of the loan advance.
To discuss a new enquiry or for any further information, please call us on 020 3397 7055
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