Many people approaching retirement want to pay off their debts and sell off assets to increase their retirement fund. A recent example was a person who wanted to close his business, settle outstanding business debts and sell a country estate.
The estate was on the market, but no buyer had been found. He intended to
downsize to a smaller house. Although the businessman had a valuable asset in the estate he was selling, he did not have enough cash to settle his business debts.
He approached a bridging finance lender who agreed on a 12-month bridging loan for £50,000, which could be used to pay off the debts so that the business could be officially closed. The estate that was on the market was used as security for the debt. Without this loan he would have been unable to pay his debts quickly, which would have adversely affected his credit record, making it difficult to get a loan in the future.
The loan was completed and funds available within six days to enable the businessman to satisfy his creditors without delaying payments. The loan enabled him to retire debt free.
Though the majority of bridging loans are for property deals, this case illustrates that bridging loans are flexible and can be used for many non-property purposes. If there is property to secure the loan, and a plan for when and how the bridging loan will be repaid, lenders are prepared to consider loans for many purposes.