Many lenders have decreased their bridging loan interest rates, making bridging even more attractive.
A frequent reason for bridging finance loans is refurbishment, because refurbishing a building can add more capital value than the refurbishment costs. Commercial tenants nowadays demand better quality facilities from their rented office space. Bridging loans can be used to finance an office space upgrade. Refurbishment work is also needed to convert commercial property to residential use. Projects can range from simple loft conversions, to basement digs and building extensions.
To attract more business, some lenders have decreased their interest rates to around 0.75% a month for loan to value bridging loans of around 70%. Loans are available for up to 24 months with no exit fees or early repayment penalties. They are also available as first or second charge loans. Individuals as well as limited companies can apply for loans. Loans are becoming more favourable for borrowers due to both competition amongst lenders and demand from brokers for better deals.
Bridging loans, though short-term, are quicker to arrange than more long-term finance. They are popular with developers who want to improve property then sell the property at a profit shortly after the work has been completed.
A bridging broker can source the best loans for investors. Some bridging loans are needed until longer term finance can be arranged. A good broker will be able to arrange both short and long-term loans. A broker with specialist knowledge of property development can advise borrowers on their refurbishment projects and the best way to finance them.