Bridging Loans | Short-Term, Open and Closed Bridge Loans Scotland

Short Term Finance To Cover The Gap

What is a bridging loan?

A bridge loan is effectively a borrowed amount that is used to cover a gap in long-term finance arrangements or to cover specific short-term requirements. Think of it as a "bridge" between longer-term loans and payments.

With similar amounts of finance as a mortgage but with a shorter-term repayment structure, bridging loans are often used to 'bridge 'the gap in moving a business into new premises or cover a personal loan while you wait to sell.

Further explanations of a bridging loan are:

Short term financing to 'bridge' a gap in arrangements
Typically taken out for 12 months for residential bridging loan or 18+ months for commercial bridging loan
Short term structured loan costs
Borrowing is often repaid in less than a year

But you still may be wondering, why should I take out short-term financing?

We'll explain the benefits of short term bridging finances and the reasons why bridging loans are an attractive option for many borrowers in Scotland and across the UK.

bridging loans in Scotland

The advantages of a bridging loan

Wondering what the advantages of a bridging loan are? We've listed some of the top benefits of bridging loans below:

Terms can be tailored to suit your unique circumstances and projections.
A short-term bridge loan can be arranged much quicker, within days or weeks, rather than months, as with a regular residential mortgage.
This type of loan is secured against property value, meaning they do not focus on your income or credit record.
For regulated bridging loans, the interest will be included in the total amount of the loan, which is to be repaid by the exit strategy at the end. This helps to relieve financial pressure on homeowners already paying for a personal mortgage.
The same option to include interest loans in the total amount is also available to non-regulated investor borrowers, reducing the pressure on cash flow throughout the project.
It's possible to secure high loan to value (LTV) financing with a bridge loan. Many lenders are willing to offer 75% LTV terms, or up to 100% LTV with additional security. The ability to source such a significant percentage of the finance needed gives borrowers sufficient leverage in buying a property in Scotland.

short term bridging loans

How to get a bridging loan

The bridging loans and development finance market has been enjoying brisk trading in recent times, and the Lending Channel can provide access to a wide range of secondary lenders in the mortgage market.

Based in Scotland, we are experts in the Scottish bridging loans market , finding the best loan services available for our clients across the country (including Glasgow, Edinburgh, Fife, Dundee and Aberdeen) and throughout the UK.

We provide guidance, support, and services to secure the best market leading loan rates that will meet all your requirements for short-term financing . We are here for you with an extensive network of lenders and specialist knowledge in the bridging market.

Get in touch with our team of bridging loan lenders, whether it is to simply ask 'what is a bridge loan?' or discuss your specific requirements and how we can help find you the best loan interest rates on the market.

Who qualifies for a bridging loan in Scotland?

Many people can qualify for a bridging loan, you just have to meet a number of requirements to prove you are a suitable candidate. Lenders will look for:

Those who can and those who can not prove income.
Those with an excellent or a bad credit rating.
The employed, self-employed or non-employed.
Companies or individuals.
Those with equity tied into their property or an available cash deposit.

different types of bridging loans

What are first and second charge bridging loans?

When a bridging loan is taken out, a 'charge' will be placed on your property. This charge acts as a legal agreement that prioritises the lenders who will be repaid first your loans not be repaid.

If your property has a mortgage, it will likely be the case that a 2nd charge loan is what is taken, which that if the loan's repayments are completed, your home will be sold off to repay the debts with the mortgage being paid off first.

If the property is owned outright, or the bridge loan was to repay a mortgage in full, a first charge bridging loan would be taken out. This means that the bridge loan would be paid off first if you fell behind with repayments.

Specialist Finance Panel

Our panel of specialist finance lenders can arrange bridging loans for many reasons, typically:

Open bridging loans and closed bridges; when there is a gap that needs bridging for property acquisition
Auction purchases, particularly when buying properties under market value
Development finance and short-term property finance; funding to purchase land or property for development (this funding is then redeemed by either the sale or refinance of the developed asset)
Cash flow
Tax bills

It is essential to consider your exit strategy before committing to a bridging loan, as this is a form of secured loan, and your property is at risk if you don’t secure funding in time to repay the bridging loan at the agreed date.

Please note that specialist finance of this type is not always authorised and regulated by the Financial Conduct Authority ; therefore, our funders can afford to adopt a more flexible approach to assessing deals. Whatever your situation, give us a call to see if we can help.

The quickest way to have your short-term finance enquiry assessed is to telephone one of our advisers on 01738 583008 or complete the online enquiry to start your loan process.

The Lending Channel: Bridging Mortgage Lenders

If you feel that a bridging loan could be right for you, whether its a business loan or a residential property bridging loan, the best advice we can give is to speak to a loan broker and mortgage experts.

The Lending Channel is highly experienced in helping clients in Scotland get the type of finances they need.

Speak to our team today to see how we can help you achieve the right bridging loan you require.

Introducers

If you have landed on this page and you are not a direct client looking for a lending solution, perhaps you are interested in introducing business to us?

If so, please call now for more details or follow the Introducers Link.

Case Studies

4.92% Secured Loan

The Lending Channel team recently completed a large £100k Secured Loan for a property client who needed to raise the cash quickly to assist with a property transaction.