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Bridging Finance for Landlords: An Appealing Prospect.

When considering the aspects of bridging finance, it’s easy to understand its popularity among landlords. Letting out one or more properties is the same as running most businesses. Unexpected expenses can emerge at any time, which in the case of landlords can be both extreme and urgent.

There is also the urgency that accompanies limited-time investment opportunities as a landlord. If you’re proactively looking to extend your portfolio, you may occasionally come across an opportunity you don’t want to miss out on, and if you don’t take advantage of it immediately, someone else will.

The popularity of bridging loans is accelerating at record-pace. When you consider a few things from the perspective of landlords and buy-to-let investors you realise why this is the case.


Why Landlords Love Bridging Finance.

A recent study highlighted six primary motivations of landlords applying for bridging finance. In no particular order, these were found to be the most common reasons landlords in the UK apply for bridging loans:

  • Auction finance - Snapping up a bargain property at auction means coming up with the funds to cover the purchase as quick as possible. Conventional mortgage products can be cumbersome and slow to arrange whereas bridging loans can be arranged quickly and are extremely flexible.
  • Business finance - Landlords often use bridging finance to fund their business activities. Short-term business finance can be particularly useful when facing an unexpected financial shortfall. 
  • Refurbishment - Planned or urgent building refurbishments and renovations often call for sizeable cash injections. Bridging finance makes it quick, and affordable to carry out refurbishment and renovations that cannot or should not be delayed. 
  • Re-bridging - Refers to the process of transferring one bridging product to another. 
  • Mortgage delays - when applying for a mortgage and there are delays, a landlord would traditionally be forced to watch investment opportunities slip through their fingers. Bridging finance can be used to ‘bridge’ financial gaps. 
  • Pre-sale improvements - Many landlords and property owners in general use bridging finance to improve quality and boost the resale value of their properties, before selling the property for the maximum value.
Bridging finance is the epitome of a ‘right place at the right time’ financial product, which offers speed and convenience that does not exist on the High Street.

The Benefits of Bridging Finance.

To conclude, the primary benefit of bridging finance is speed to complete the application. From the point of application, it can in some circumstances take as little as 72 hours for the funds to be made available. With a more traditional mortgage, you could be looking at several weeks or even months for the underwriting.

Bridging finance is popular among those who may find it difficult to qualify for a traditional loan. Some bridging lenders look beyond the usual credit reports to consider alternative source of funding for applicants. If you are in a strong financial position and have the collateral needed to cover the costs of the loan, it should be possible to obtain a bridging loan.

Unlike conventional lenders, bridging lenders are more flexible on the use of the loan. A bridging loan can be used for almost any legitimate purpose, with few limitations imposed. Perhaps most importantly of all, a bridging loan repaid in full and on time, can also be uniquely cost-effective.

If interested in bridging finance, arrange a consultation with an independent broker to discuss the options available.

If you would like to talk to talk directly to the lender that supplied this information visit https://www.ukpropertyfinance.co.uk or call 0333 322 55 44.

UK Property Finance - 2C, Kibworth Harcourt, Kibworth Business Park, 2 Harborough Rd, Leicester, LE8 0EX.