As there are a large number of bridging lenders, choosing one can be a difficult and time-consuming task.
Many people mainly look at the interest rate and fees charged when choosing a bridging loan. Jonathan Sealey, writing for MortgageStrategy.co.uk in April 2017, advised borrowers to be cautious and not base their decisions solely on low prices.
Sealey said that Lenders are funded in two main ways: either the lender has their own funds, or uses external credit. A lender may have agreed to a loan application, but if they are funded externally, an external credit committee may make the final decision. The committee could turn down the loan and disappoint the applicant.
A lender that finances loans from their own resources will always stand by their decisions to provide the bridging loan.
Thanks to intense competition between lenders, many are concentrating on a particular type. Areas of specialisation include short-term secured business loans, development loans and second charge loans. There are advantages in choosing a specialist lender who has expertise in the type of loan the borrower needs.
Some lenders compete on services or offer high-speed loans. They may not be cheaper on price, but for time sensitive deals, rapid loan decisions can be an advantage.
To make sure that borrowers choose the best lender and product for their particular financial needs, it helps to use a bridging broker. A broker has access to a wide range of financial products and providers. They can match their client’s individual financial needs with the most suitable bridging loan lender.