One of the advantages of a bridging loan is the speed in which it can be arranged. A standard or commercial mortgage can take several weeks from initial application to when the funds are available. If finance to complete a property purchase is needed quicker than this, on the other hand, a bridging loan can be used to complete a sale before mortgage funds become available.
An initial acceptance of a bridging loan application can be given in a matter of hours, with the money available within a few days. This is good for property investors, who may need to be quick to secure an investment opportunity before it is sold to another buyer.
If you are a limited company that has been trading for two years or more, it is possible for a loan to be available in less than an hour. This is because a lender can view the company accounts online and quickly perform a credit check.
A bridging loan for a commercial company can be used for non-property purposes in order to quickly raise finance. Many of these loans will be closed bridging finance, which means that they will need to be paid back at a fixed date.
One of the reasons that a bridging loan is faster than other loans is because they need less documentation. Lenders do, however, need to know that the property can act as security and they also need a clear exit strategy, which outlines when and how the loan will be repaid.