Most bridging loans are for businesses or individuals. Charities and non-profit organisations usually rely on donations and other fundraising activities to finance projects. There are occasions when bridging finance can benefit charities. An example is Giroscope, a charity that purchases and renovates empty properties to help relieve the housing crisis in deprived neighborhoods. The charity applied for a grant to purchase commercial property, but this was turned down. The charity managed to secure a bridging loan to purchase the property. It was then renovated and is being used as a community hub that provides training services and rents out space to community businesses. In 2017 Giroscope received money from a grant and a bridging loan to purchase and renovate three properties as well as developing a self-build project. These two Giroscope loans were for projects that generated income, and this is what lenders are looking for when considering loan applications from charities. Any organisation applying for a loan needs a detailed business plan and three to five years accounts to show that they are financially sound. Projected costs of projects need to be accurate. It is better to overestimate costs than underestimate them. Like all bridging finance, there must be a plan for when and how the bridging loan will be repaid. Not every project that a charity needs money for is eligible for bridging finance. To find out more talk to a bridging finance broker who can approach lenders to find the best bridging finance deals.
May 10, 2022
