Time is money as the old saying goes and that is especially true when it comes to bridging finance. At
Michaels Commercial we are aware that the timing of deals in the real world is not always straight
forward, so we are always on hand to quickly assist you in securing short term bridging finance for both
business and residential purposes. We will customise a solution to your exact requirements in a timely,
efficient and speedy manner.
Michaels Commercial can offer Bridging Finance for nearly all your borrowing requirements, including:
• Short term property development finance for established professional developers and individual investors
• Tax bills – Personal, VAT and other creditor demands.
• Commercial and residential property / land purchase - open ended and fixed term agreements so you can fully maximise your bargaining position when the opportunity arises.
• Auction sales and to acquire property deemed 'unmortgageable' (i.e. fire damage, structural issues) in its current state which can be acquired under market value to maximise potential profit.
• Finance for employed and self-employed applicants and generally with no proof of income required.
• Finance to stop property re-possessions.
• “Chain-Break” situations when your property sale runs into difficulties but will still allow you to complete on a new residential purchase when your own sale is delayed or fallen through ensuring you don't lose your desired property, whether it be in the UK or overseas.
• And many, many ,more reasons – please don’t be afraid to call and ask what we can assist you with.
How Does Bridging Finance Works?
Bridging Finance is a short term flexible finance solution secured via a legal charge on freehold or long leasehold property as either a first or second charge with loans also being able to be secured against land, development sites or other personal assets such as jewellery, executive cars and works of art for example.
What is the difference between Open and Closed Bridging?
Open bridging, is where a loan’s repayment (often called an “exit”) method is known but not yet fully formalised, most commonly the sale of an asset that is currently being marketed where as a Closed bridge is a loan where the exit or repayment method is fully finalised, for example, the sale of a property where an exchange of contracts has taken place.
What are the main costs incurred for setting up a Bridging Finance Loan?
Borrowers will be required to pay the legal fees for the lender associated with setting up the bridge and these will vary on a case by case basis but as a rough guide we would recommend allowing a budget of circa £500.
For the majority of cases, you will be required to obtain an independent valuation of the asset or assets being offered as security and again, the cost for this will vary on a case by case basis as each type of asset will have varying levels of work to value them but as an estimate we would suggest budgeting £1.50 to £2 per £1,000 of value.
Set Up Fees and Interest Rates:
Set up fees on bridging finance is usually a percentage of the amount being borrowed, usually between 1% to 2% and the interest rates at the moment start from as low as 0.54% per month/6.5% per annum. Loans secured on non-property assets such as cars and jewellery will be charged at a significantly higher rate due to the risk profile. The only break to the rule is for “chain-break” home movers where the arrangement fee covers the valuation and legal fees but as with any type of lending we will be transparent and up front about all fees with you from the start. We appreciate that bridging is traditionally seen as high risk and a “last resort” option but given the changes to the UK financial market post credit crunch and products available that simple is not the case anymore.
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