Bridging finance is a short term – usually 1 to 18 months – loan backed on a property. These are often used to give you capital for a period of time whilst allowing you to either refinance to longer term debt or sell a property.
Monarch Solicitors can advise on many different aspects of bridging finance, including:
- Drafting advice on legal charges, debentures, personal guarantees, assignment of rights
- Advising on loan agreements
- Drafting letters
- Intercreditor arrangements
- Amendments, waivers and variations under loan and security documents
- Undertaking due diligence over the property to be funded
- Preparing and reviewing reports
Contact our Corporate Solicitors:
If you would like to enquire about any matters relating to bridging finance please complete our online contact form here or send an email to us at [email protected] and one of our solicitors shall call you back.
Alternatively, please call our corporate solicitors in Manchester on 0330 127 8888 for a no obligation discussion.
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This is a type of short-term property finance used to “bridge” a temporary gap in funding: to allow property purchases or development to move ahead quickly when other finance isn’t available or has fallen through. It can make you effectively a cash buyer, leapfrogging to the front of a queue of qualified purchasers. A bridging loan is secured against the value of assets (usually property) and will have a clearly defined exit strategy agreed with the lender for repayment of the loan.
If the property that a bridging loan is secured against (either as a first or second charge) is your own home, or the home of a family member, the terms of the loan are regulated by the Financial Conduct Authority (FCA) and the maximum term is limited.
If the property is not a family home, or if the loan against a family home is for more than £25,000 and intended for business purposes, or if the borrower is regarded as a high net worth individual, then the bridging loan will be unregulated and may have more flexible terms.
- Ultimately, your lender could take possession of your secured assets to get their money back. But for reputable lenders that’s not good business for them. Lenders will usually be in contact as your repayment date approaches, to check that your exit plan is still viable. If there’s a good reason why you need an extension, most lenders will be prepared to give you more time to complete your exit and repay.
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