Thinking about buying a new house but your already existing one is on the mortgage and the finances needed to pay for the new house are not being arranged? Then you have a perfect solution with bridging finance. This term bridging finance involves the short term loan solutions with minimal amount of paperwork and referencing. It is a type of short term loan which is taken out for a period of 2 weeks to 6 months for arranging any pending loans and paying it off later after the arrangement of capital has been made. At times it is also called as “caveat loan” or “swing loan”.
This type of loan is made either on an individual basis or for business needs. Once the payment is done for the immediate need, it is returned later when funds are arranged. The only difference in this type of loan and long term loans from the banks is that long term loans demand more referrals and documentations while this short term bridging loan needs no such thing.
There are two schools of thought,one which says that bridging loans require greater interest rates hence are not worthy and the other school arguing that even if the rate of interest is greater, it is effective for shorter term hence the total interest rate comes down to the same value as in long term loans. Also they debate that the paperwork required is very less in bridging loans and hence they easily cater to the immediate needs of the client. Being a helping hand in real estate, this bridging loan proves to be beneficial for the individual who is into this business. Various brokers and banks are offering this kind of bridging loans these days. No matter what kind of situation you are into, do consult a broker or bank to fulfil your needs.
Bridging loans are also used for commercial purposes. These are seen to be most beneficial historically when you have to move on by selling your old home and can’t arrange the buyer. But buying a new home instead is very necessary. So the coinciding point of the two i.e. selling old one and buying a new one is not possible many times and this financial gap is being bridged by the birding loans. They offer you 6 months of loan, makes you buy the new home and later when you get good payment for your old home, you can sell that one and repay your bridging loan. See how effectively it controlled themismanaged situation of finances!
The need of this bridging loan is not limited to the real estate business only but has extended its areas to other kinds of business too. No matter what business you are into, this bridging loan can be your life saver. Sometimes we expect funds to generate through our business at some specific time but due to various reasons, they are delayed. Now further money is required to run the vicious circle of business i.e. to buy the new machinery, the raw material etc. this gap in the finance is covered up by the bridging loan. You just take this loan and then repay later when the funds are generated in your business.
Hence, there is no denial in the fact that bridging loans are of great necessity in today’s competitive world. To meet the demands of growing finance, one or other form of loan is always taken then why not this bridging loan which can take us to new heights of achievements and success. Don’t hesitate and grab the opportunity!