Bridging loans are short term loans, usually less than a year. A bridging finance broker can arrange a bridging loan but the relationship with their clients does not have to end after the short-term loan period.
Bridging finance used to be regarded as a niche product that was only used in emergencies. If there was an unexpected hold up on a house sale, a bridging loan could be used to complete the sale. Nowadays, bridging loans are much more mainstream and are used by many people other than private residential homeowners. They are a useful tool for property developers, can help purchase property bought at auction, and can be used to refurbish property for landlords. Businesses can use bridging loans for short term capital for a variety of purposes.
The Association of Short Term Lenders (ASTL), a trade body of bridging finance lenders, is nearing its 10th Anniversary. Over the life of the ASTL annual lending has grown to around £3. 8 billion a year, making bridging finance a buoyant and valuable part of the financial lending market.
Businesses and property investors often need several bridging loans over a few years. When they find a good broker, they will tend to use the same broker for each loan application. A relationship between broker and client can be a long one. A broker who is familiar with a client’s business is able to match their borrowing requirements with the best specialist lender.