When a bridging loan is the right way to go
There are a number of scenarios where bridging is appropriate for clients and brokers need to be able to recognise these, says Laurence Goodman, managing director of Bridgebank Capital
short-term property loans. This product should never be used as
A
a form of permanent term financing. It is project financing that ideally will be repayable through a property sale or refi- nancing inside a 12-month period, so any reason for using this form of finance must be supported by a realistic and deliverable loan repayment proposal. In the current mortgage climate, it is
evident that mainstream lenders are reluctant to consider development or speculative lending proposals. Aside from home owner mortgage
s a starting point, advisers and borrowers need to know when not to use bridging finance or
lending they will really only consider long-term mortgage financing on prop- erty assets that are delivering proven cash flows at yield levels that demon- strably service debt finance costs. Therefore, on the assumption that the bridging loan exit strategy through prop- erty sale or refinance can be relied on, this article identifies key scenarios in which advisers should be looking to try to identify when a bridging loan is the appropriate solution for their clients’ financing needs. At Bridgebank Capital, we have sup-
ported advisers for a number of years through our well-publicised Complete Guide to Bridging Finance leaflet,
GUIDE TO BRIDGING FINANCE
The
guide to Bridging Finance 2012
17
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