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Commercial bridging loans
Taking out a commercial bridging loan is another way of quickly raising finance for your business. At Service Central, we work with a specialist panel of bridging loan lenders.
A bridging loan is secured against your business property. Most types of commercial business property can be considered as security.
Commercial bridging loans work particularly well when you need money in a hurry. This is because the application and decision process is quicker than for a commercial mortgage.
Suppose you know property or plant is coming up at auction, you think you can get at a good price and doing so would help your business grow. A bridging loan could provide the funds you need until you are able to arrange a longer-term form of borrowing or can clear the bridging loan some other way.
Is the bridging loan right for you?
Service Central will guide you through the process, read the small print for you and make sure you understand it. We will help you to decide whether in the particular circumstances you are facing, a bridging loan is the best financial product to meet your needs. Service Central will have your back at all times.
Careful consideration needs to be given to how you will exit the bridging loan and what you will do if that plan fails.
Service Central will help you to assess the total cost of your bridging loan, and whether the loan terms, usually 12-24 months, is long enough for the purpose for which you want it. They will also make clear the action the lender is likely to take and the fees they will levy should you default.
How much is available as a bridging loan?
Service Central can arrange bridging loans of between £100k and £20m, with some lenders prepared to advance up to 75% of the property value. This is called the loan-to-value or LTV rate. It is the way lenders assess the risk they are taking granting a loan.
Basically, the greater the equity in a property, the lower the risk to the lender. If a loan has a high LTV rate, the interest rate levied will be high. Service Central can get interest rates as low as 0.65% per month when the borrowers profile is unproblematic. Where the lending risk is higher, interest rates of between 1% and 1.75% per month are typical.
How quickly can I get a bridging loan?
Service Central has worked with clients and lenders and secured a bridging loan in one day. However, this is the exception; the process usually takes between one and three working weeks. Ultimately the time scale will be dictated by the size of the lend and how established the company taking out the facility is. The key part of any bridging facility is the exit strategy and this must be very clear and achievable.
The advantages of having Service Central as your bridging loan broker
The lenders we work with know us, and our reputation and we can get favourable interest rates and exit terms in many cases, we also operate a whole of market approach so can appraise your business and introduce to the right lender for your needs. We can also introduce smaller lenders who you may not have come across which increases potential options.