Thursday, November 29, 2012

Things You Might Know about Bridging Loan


Bridging loans is one source of fast cash that can answer any urgent financial need. This loan is ideal for those who do not have sufficient time to make arrangements to secure long term loans. This is considered to be a finance option that is short-term as it is made easily available by the lender. One great advantage of this kind of loan is the fact that you need not prove your creditworthiness in order to avail of it. While it may require you to post some kind of securities, it will just be the basis of the amount of money you can borrow. Bridging loan offers numerous advantages, but one must carefully study its terms and conditions before signing up for one.

Bridging Loan and the Fees Attached To It

Bridging loans can be taken by those individuals or businesses in dire need of financial assistance. However, this kind of loan may have higher interest rates, considering that the lender also bears higher risk. Other fees to pay include valuation fees for those who will evaluate the value of the asset being given as a security. You also need to pay administration and legal fees. Some of the lenders offering this kind of loan also offer equity participation. When it comes to formalities, there is no strict form required which can assure you that your loan amount will be disbursed immediately.

Commercial Bridge Loan for Corporate Financing

For business financing, a commercial bridge loan can be used for many different purposes. For one, it is used in carrying the works of a business when it is looking for some new investors. The money obtained from a commercial bridge lender for securing the loan is useful to finance routine expenses of the business during this process. When an interested party starts investing, the cash flowing from such investment can be used to repay the bridge loan. When partners in business withdraw their contribution upon retirement, it may become difficult for the business to continuously thrive with its remaining capital. This is another case where commercial bridge loans can be used to smoothly run the operation of the company again.

Bridging Loan for Purchasing Real Estate

Bridge loans may also be available to those who intend to purchase real estate. You can obtain a bridging loan if you intend to buy a new property and need to make a down payment on it. However, you may be required to post a collateral security before your application will be approved. Once you can secure the loan, the proceeds can be used to make your down payment. After you have found a buyer for your old property, you can use the proceeds of the sale to pay off the bridge loan. Should there be a balance after paying off the loan, it can be applied to the remaining amount due for the new property. With this, you will be assured that you will not lose the property you always wanted simply because you do not have the funds available.


Author Bio:
Joel Cordle is marketing lead at Microbank.com.au, Micro bank is Friendly and Professional Lending Company, provide bridging loans and bridging finance as fast as 24 hours. We offer different types of bridging loans and help people those are buying a new property or need investment for business.




1 comment:

  1. It's good to be informed about bridging loans and the other different kinds of loans. I need to know my options before I choose one that will be suitable for me.

    ReplyDelete


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