Bridging finance is being used to fill the gaps in the lending market caused by major lenders being more cautious. In today’s climate of political uncertainty, some large lenders are being more cautious about buy-to-let and commercial mortgages applications. According to finance expert Jonathan Sealey writing on the website MortgageStrategy.co.uk in June 2017, the demand for bridging loans is increasing because many property investors are having difficulty obtaining conventional loans. Providing that borrowers have a clear exit strategy for when and how they can repay the loan, Sealey sees bridging loans as a credible alternative way of raising finance for purchasing and developing property. Bridging loans are speedy and flexible, and can typically be arranged much more quickly than a commercial mortgage. Bridging finance companies are not bound by strict lending rules; instead, each loan is assessed individually and if the lender assesses that the risk is not too high, they can approve a loan and have the funds made available to the borrower in a matter of days. Many bridging lenders are privately funded, which means that they do not need to refer to an outside credit committee for permission to lend money. Sealey writes:
“Recent political and economic changes have enabled bridging finance to play to its strengths by doing what it does best – bridging the gap.”
A broker has access to a wide variety of lenders and is able to match a borrower to the most suitable bridging loan for their needs.
