A Bridging Loan has to be “closed ended”. This means that as a pre-condition to granting the loan facility, there must be a “defined exit” capable of being put into place within the term of the loan so as to provide a method by which the loan will be repaid at a specified end date – this will be either by way of refinancing or sale of the property. The interest charged on a Bridging Loan may be “rolled-up”, accumulated and repaid along with the principal sum at the end of the term from the proceeds of refinancing or sale of the property. Typical examples where Bridging Loans can resolve a problem:

Bridging a sale purchase transactions where there is an onward chain.
Purchase/conversion/renovation/improvement of houses and flats, for instance property developers requiring funds quickly to buy property (often at auction) to sell on at a profit within a very short time frame usually 3 months. Helping developers free up some of the capital they have tied up in completed properties awaiting sale when they are anxious to move on to their next project. Capital raising for re-investment is another bridge funding available.
Urgent capital raising – divorce settlements or Inheritance Tax situations where blocked or frozen capital can be unlocked when most needed.
To provide a financial breathing space whilst one’s affairs are being reorganised for instance urgent debt consolidation or avoiding legal action resulting from mortgage default.
To find out more give us a call on 020 3576 3620 or email info@cfguk.co.uk
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