Bridging Loan

Bridging Loans UK

A long standing who worked for a large Swiss bank required a short term loan in order to make an imminent tax payment. Having searched extensively for a broker specialising in large bridging loans UK wide, the client presented their urgent query and we were delighted to assist. The borrower required a short term loan of £750,000 secured against one of his investment properties via a 2nd charge.

What is a Bridging Loan?

A bridging loan is effectively a short term loan (12 – 24 months in length) where the interest is not serviced but is instead rolled up each month allowing the borrower to repay a full lump sum plus interest at the end of the loan term. Bridging loans UK are an effective tool for property developers as they allow you to quickly raise cash on any type of property, pay for the refurbishment or construction and then replay the full loan upon sale or refinance. There is no affordability assessment required for bridging loans and they are purely based on the current and future values of the property on which they are secured.

Where You Can Use Bridge Loan

Bridging loans London can be used as a tool for most property investors and landlords. It can be used to quickly release equity or cash from an existing property to help purchase the new one, without first waiting for the existing property to be sold. A landlord can use bridging loans UK to raise capital to refurbish or redevelop some of his property portfolio and a property developer can use a bridging loan to complete his construction project if it will only take 12-18 months to complete. It can also be used if someone needs quick cash for any legal purpose.

Types Of Bridging Loans

The first example is where bridging loans interest is calculated on a retained basis, this means that at the start of the bridging loan London, the lender calculates 12 months interest and deducts it from the gross loan amount, meaning the clients receives a net amount (gross minus 12 months interest). The second example of a bridging loan is where the interest is rolled up. This means that the client receives a certain amount on day 1 of the loan, with the interest accumulated each month added to the day 1 loan amount, and this is rolled up after each month as the loan increases over time. The lump sum will be repaid by the borrower at the end of the term.

How To Find The Right Bridging Loan

Finding the right bridging loan will be based on your individual circumstances and requirements. One of the most important aspects is pairing the borrower with the right lender for bridging loans UK. Having a bridging loan London broker provides the borrower with several lending options will also help them make the right decision. Knowing as much detail as possible about the particular transaction, the client and his background as well as they fill details of the property in being used as security – will all help a broker find the right bridging loan for any respective borrower. Putting all these details together will allow Silver Oak Capital to find the right bridging loan for property investors.

Problems To Solve

Due to the urgent nature of the lending query – we had to find a lender who could complete and draw down funds within 2 weeks. Within 24 hours of receiving the enquiry, we were able to agree lending terms with the borrower and instruct the valuation in quick succession. The lender we approached also had to be satisfied with the method or repayment being deferred bonus payments and a letter from the borrower’s employer was enough to satisfy the lenders’ loan repayment criteria.

Solution Provided

Silver Oak Capital was able to source a lender based in London with the ability to draw down funds in the short time frame required by the client. This particular lender is one of the most active in the bridging loan London market with over £4 billion in loans issued to date.

2nd Charge Bridging Loan £750,000 GBP
Fixed Rate 1.00% per month
Term 12 months
Interest Rolled Up
Valuation and Legals completed within 2 weeks