MIp18-19_1009.qxd 23/9/09 17:15 Page 20
18 | Bridging loans
Bridge the gap
Bridging finance is a useful form of funding for those in
need of a short-term loan. Gareth Lewis, national sales
manager at Cheval Property Finance, explains its benefits
What is bridging finance and
why would consumers be
interested in it?
Bridging finance is a short term loan (under 12
months) secured by either a first or second
charge over property. Monies can be used for any
lawful purpose and there is often a great urgency
whereby these monies are required in a very
short time frame. As well as speed, many
bridging companies are able to assist borrowers
in circumstances where mainstream lenders will
not or cannot do so e.g. lending to “mature”
borrowers who are in the process of downsizing
or lending to assist in the completion of a
probate.
In what other circumstance can
bridging finance be utilised?
Bridging finance has a plethora of uses. The
classic use of bridging is where a borrower needs
to complete on a purchase before selling an
existing property i.e. they need to bridge the gap.
Brokers should bear in mind that in many such
cases, bridging lenders will need and are able to
take a charge (sometimes a second charge) over
the borrower’s existing property as well as a first
charge over the property being purchased in
order to be able to provide the amount required.
Recently, at Cheval we have noticed a number
of applications from borrowers who have been
presented with unexpected income tax or VAT
demands from Revenue. These applicants were
threatened with imminent court action and we
were able to assist by releasing equity from their
properties within a very short time frame thus
both preserving their clean credit histories and of
course relieving the enormous stress involved.
As bridging lenders are flexible in their
approach, they are often able to lend against
properties which are deemed unsuitable security
by mainstream lenders. For instance, where
© Lumaxart2d
properties are technically “uninhabitable”, but
October 2009 Mortgage Introducer www.mortgageintroducer.com
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44