A recent survey by the Association of Short Term Lenders found that 70% of their members expect their business to grow, 24% expect business to remain constant and just 5% expected their business to decrease. What is fuelling this optimism?
Although short-term lenders provide bridging finance for a number of uses they are mainly for property finance. The growth in house prices is expected to slow down. In some areas, prices could begin to decrease.
Traditionally when houses price slow, mainstream mortgage lenders become more cautious and could turn down a larger number of mortgage applications. Bridging finance is more flexible and can sometimes be used to raise finance on property that a mainstream lender will not provide finance for.
Increasingly businesses need funds to finance deals that are time sensitive. A standard bank loan can take a while to arrange, and this could be too late to secure the deal. Businesses turn to bridging finance because lending decisions can be much quicker.
Traditional bridging lending, which is used to complete property deals for owner-occupiers, quickly will continue to be a part of the short-term lenders business. This area of bridging finance may not grow as much as other uses for bridging loans.
Members of the Association of Short Term Lenders agree to conduct their business in a professional and ethical way, even in areas not covered by the financial regulations.
A bridging finance broker helps borrowers find the best bridging loan deals for their individual requirements.