How to halve the cost of short term bridging

Halve the cost of short term bridging

Do your clients ever ask for short term finance? If so, there is a fair chance that bridging will immediately spring to mind.
However there can be massive savings in the costs depending on the approach taken.

Many bridging loans don’t complete – often because the benefits are not great enough to outweigh the costs – it just doesn’t make financial sense.
But a term loan with no ERC’s could deliver a better result at far lower costs which makes the whole project viable.

Here’s a recent example – saved £10000 over 12 months:

When considering a £150,000 second charge bridge the borrower saved £10,000 by taking a term loan instead and it didn’t put them under pressure to refinance after a year.
In this case the money was needed to complete and sell a development but the loan was secured on the borrowers main residence. Consequently rather than being forced to refinance, the term loan gave the borrower the required cash flow to roll straight over in to the next project without paying another set of fees and costs.

Sure bridging finance can often happen faster as there is no burden of proving affordability – and there may be no monthly payments to service.
But where affordability is not an issue, the interest costs can be more than halved, the need to find an exit is removed and the costs of refinancing disappear.
Otherwise on a regulated term loan, the process is broadly the same but without any involvement by the borrowers solicitors (which can so often de-rail matters).

On your next bridging enquiry let me also explore the second charges term options for you.
Remember second charges can be used for business purpose, tax or for heavy refurbishments – a low cost second charge facility with the option to settle or overpay without penalty could make good sense for many borrowers.

Call 01902 585052 to speak to an underwriter.

www.promisemoney.co.uk

01902 585052