Bridging finance is designed to provide the kind of accessibility and versatility that exceeds almost any conventional loan. Particularly when funds are required for major purchases as quickly as possible, there’s little (if anything) more convenient and accessible than a bridging loan.
But what does it take to qualify for bridging finance? From the perspective of both business and private applicants alike, what can you do to ensure your application is accepted? Just as important, how can you influence the interest rates and overall borrowing costs of the loan, should the lender approve your application?
A Case of Collateral
What’s interesting about bridging finance is the way in which it is provided near exclusively on the basis of collateral. There are hundreds of different types of secured loans available these days, though the vast majority take into account far more than security. With bridging loans, it’s almost always the exact opposite – collateral is everything.
Hence, if you can provide sufficient collateral to cover the total cost of the loan, you’re almost guaranteed to be accepted. Many bridging lenders aren’t interested in credit checks, proof of financial status and other typical criteria. Instead, just as long as you have enough collateral to secure the loan, that’s all that matters.
Acceptable Assets
In terms of what qualifies as acceptable collateral, this is something that differs significantly from one lender to the next. More often than not, bridging lenders will expect the applicant’s property to be used to secure the loan. Residential and commercial properties are usually viable if the applicant is the rightful owner at the time.
Unlike traditional mortgages and more conventional secured loans, the applicant need not necessarily be the permanent occupant of the property used to secure the loan. In addition, lenders will often accept valuable assets such as cars, jewellery, land and development properties to secure a bridging loan. Typically with no deposit payable whatsoever under any circumstances.
Credit History
While it’s not always a requirement to undergo a credit check, there are some bridging lenders who include them in the application process. Even if your credit history doesn’t count you out of the running, it could have an impact on the loan’s overall borrowing costs.
As a result, it’s worth speaking to a broker before submitting a bridging loan application if your credit history is less than perfect. This will ensure only suitable lenders and products are targeted during the market comparison.
Compare the Market
Speaking of which, the best way to qualify for a bridging loan is to have an independent broker compare the market on your behalf. The flexibility and accessibility of bridging finance means that all applications can and will be considered by way of individual merit.
Rather than approaching any specific lender directly, it’s far more effective to conduct a whole-of-market comparison beforehand. This way, you’ll determine which lenders to focus your attention on, along with which can be overlooked as unsuitable for your requirements.
Article by iConquer
OhNoCrypto
via https://www.aiupnow.com
Chad Stewart, Khareem Sudlow
