FINANCE SOLUTIONS
Our commercial bridging loan service provides short-term financing to cover the gap between purchasing a new property and selling an existing one. This type of commercial bridging loan is mostly used by individuals or organisations to bridge the period between the purchasing of a new property and the sale of an old property. This especially happens when the financial resources from the sale are not immediately available.
A business bridging loan is quite similar to a personal bridging loan. It provides short-term finance to bridge a gap in funding for a business. These loans address immediate fund issues and are often used in property purchase or development and to manage temporary cash flow problems that may arise due to late payments from customers, or unexpected expenses.
A commercial bridging loan is also helpful when an organisation is expanding and needs immediate financial flow. Businesses might use bridging loans to meet short-term capital needs, such as funding an advertising campaign or getting a competitive edge by acquiring a new business opportunity.
In cases where an organisation undergoes a merger or acquisition, a bridging loan may be used to cover the initial costs. This happens while waiting for the completion of the transaction. However, it is important to remember that business owners considering a bridging loan should analyse their financial situation. They should have a clear repayment plan. There is also a need to explore alternative financing options.
Purpose: Secure a property purchase quickly, generate short-term business cash flow from an existing property, fund refurbishments and use as pre-construction finance.
| SECTOR: | Commercial Only |
| CHARGE: | 1st charge only |
| FINANCE: | £100k to £1m |
| FINANCE TO VALUE: | Up to 75% |
| RATE: | From 1% per month |
| ARRANGEMENT FEE: | From 1% |
| APPLICANT: | UK and non-UK residents and companies |
| TENURE: | Freehold or leasehold |
Business bridging loans are secured against valuable assets. The value of the property is assessed to estimate the loan amount. Some common types of assets that can be used as collateral for commercial bridging loans are commercial properties such as retail spaces and warehouses.
Other than this, residential properties can be used as collateral. Also, vacant land with the potential to develop and the current inventory of manufacturers or retailers can be used to mitigate the lender’s risk. Businesses in construction and manufacturing may use equipment and machinery as collateral.
On the other hand, organisations in the retail or hospitality sector may use their shops, restaurants, or hotels, as collateral for a bridging loan. Remember that it is also common for lenders to conduct timely assessments to ascertain the value of the collateral.
Leveraging your business interests with a commercial bridging loan refers to using short-term financing tactically. This is done in order to capitalise on time-specific opportunities or address immediate financial requirements. For this, you need to define the purpose behind opting for the commercial bridging loan. It can be to encash a time-oriented business opportunity, a property merger, or address temporary cash flow problems.
The next step is to analyse the amount of funding required. You need to thoroughly understand the costs associated with the bridging loan. This includes interest rates, fees, and repayment terms. Remember that having a feasible repayment plan is important for repaying the loan within the agreed-upon timeframe. This may involve selling assets or securing long-term finance. Organisations can also generate revenue through business operations. Individuals and organisations need to identify the necessary collateral and select a commercial bridging loan provider with experience and repute.
You also need to prepare all required documents for the loan application. This may include any financial statements, business plans, or property valuation reports. Thereafter, once the loan is approved, you need to execute your strategy according to the established plan. Finally, there is a need to regularly monitor your business's financial performance during the bridging loan period.
Business bridging loans work as short-term financing solutions. They are designed to bridge a gap in funding for a business. These loans are used to address immediate financial requirements or encash time-oriented opportunities. Organisations opt for bridging loans when they cannot meet their short-term financial needs through traditional financing options available on the market. They may need a commercial bridging loan for funding a purchase of property, fulfilling cash flow gaps, or seizing a business opportunity.
Bridging loans are short-term. Their timeline usually ranges from a few weeks to a few months. The loan amount is based on the organisation's needs and the value of the collateral being used to secure the loan. Bridging loans are often secured against business assets. One needs to remember that the value of the collateral helps determine the loan amount and mitigates the lender's risk.
When starting the application process for a bridging loan, individuals and organisations need to submit relevant financial documents and business plans. They also need to discuss details about the use of the funds. It is on this basis that commercial bridging loan providers assess the feasibility of the loan purpose. If the application is approved, the lender provides the funds to the business.
It is important to remember that businesses need a clear repayment strategy while securing a bridging loan. This could involve repaying the loan with funds from the sale of an asset, choosing long-term financing, or using organisational profits. The repayment plan is important to avoid loan default and subsequently the potential loss of collateral.
As the organisation executes its repayment strategy, it repays the bridging loan within the agreed-upon timeframe. The underlying thing is that it's important for businesses to carefully consider their financial situation, the urgency of their financial needs, and the terms of the bridging loan before finalising it.
To apply for a business bridging loan with Kinetic Finance, you generally need to follow these steps.
Finally, Kinetic Finance will review your application, perform necessary checks, and assess the feasibility of the loan. Once your application is approved, Kinetic Finance will provide the agreed-upon funds.
Yes, it is possible to get a bridging loan with bad credit. This is subject to the fact that you have a strong exit strategy for repaying the loan and can offer the security we need. So, bad credit bridging loans may be available to both personal and commercial borrowers.
A commercial bridge loan is a short-term finance solution used by businesses to bridge a gap in funding. It is used to address immediate financial needs, such as the purchase of property, urgent capital requirements, or business expansion. The term "bridge" means that this loan is a temporary solution until a more long-term financing measure can be secured.
Lenders may offer a loan amount based on a percentage of the estimated value of the collateral. Loan-to-value (LTV) ratios can change. However, they often fall in the range of 60% to 75% of the property's value.
Approving a commercial bridging loan should not take more than 24 hours.
You can apply for an inquiry on the website, mail or call on the number shared on the website.
Bridging loans are charged monthly, with rates at 1.5% being common.
