Bridging Loans Manchester
If you’re looking for a short-term solution to a financial problem you’re facing, then bridging finance might just be what you’re in need of.
This is a specialist type of loan, designed to provide borrowers with temporary cash flow (often known as the ‘bridge’) until an expected, permanent finance option is available.
If you’re in Manchester and you’re hoping to get a bridging loan, you’ll be glad to hear that this city in particular offers quite a few solutions.
First though, let’s just take a quick look at what makes this type of financing so beneficial and get a better idea of whether this is the right kind of loan for your needs.
Why are bridging loans so useful?
If you’re ever in a situation where you have a deadline approaching and your collateral isn’t quite there yet, a bridging loan can help you to fill in the financial gap until you’ve got the cash you need.
The most common example of this type of financing is when you’re looking to purchase a new property, but haven’t yet sold your current one.
Whether the sale hasn’t fully gone through or you haven’t found a buyer, you could make use of a bridging loan to purchase your new home and pay off the loan once you’ve got the money from your old property’s sale.
Closed bridging loans and open bridging loans
To better suit different situations, there are two forms of this finance to choose from; closed and open bridging loans.
If you’ve already agreed to the exchange of your current property and are simply waiting for the finance to secure it, you could make use of a closed bridging loan.
Often, this form is easier to obtain, since most banks are more comfortable with lending to people who are at this stage in the mortgage process (as the transaction isn’t likely to fall through at this point in time).
On the other hand, if you haven’t found a buyer yet, you could use an open bridging loan instead.
While not as easy to get (since they’re riskier than closed bridging loans for the lender), they can be an excellent option for those who are confident that they’ll be able to sell their current house.
It’s worth noting that if the property has a lot of equity, your chances of obtaining an open bridging loan will be far higher.
What are some important factors to consider?
There are a number of reasons why getting this type of finance can be a good idea – and if you’re hoping to successfully apply, there are quite a few things that you should know, including:
- Due to their nature, bridging finance is often fairly quick to arrange, sometimes only taking a matter of days
- They’re often flexible, so if you need to tweak the terms to suit your needs, you should be able to do so
- In many ways, they’re not too dissimilar to mortgages – for example, they need to be secured against a property
- or assets. This makes them impossible to obtain for first time buyers, yet more convenient for homeowners who have low income and a bad credit history
- Since these are short term loans, they’re typically more expensive than long term financing options (although due to their convenience, they’re often considered to be well worth it)
Who can take out a bridging loan?
As long as you can back up the loan with security, which will often need to be an expensive asset such as a property, your application is likely to be successful.
Not only can these types of loans be worthwhile for those buying property; they can also be a great idea for businesses who are in need of additional cash flow, as well as help individuals who want to take advantage of investment opportunities.
How easy is it to get a bridging loan in Manchester
If you’re in need of bridging finance for a property in Manchester, you’ll be glad to hear that there are quite a few options available to you.
This, alongside the fact that they’re incredibly convenient, makes them an excellent option for essentially anyone who’s in need of additional cash flow.
All in all, it’s well worth looking into your options if you’re going to need a loan – and we would love to help you out. View our directory of lenders, or check out our bridging loan calculator.