Finance Roll

Anybody who has ever arranged bridging finance for a residential property purchase will know how complicated the entire process of application can be, the situation is significantly more complex when it comes to arranging commercial bridging finance. Personal finance lenders consider bridging finance to be one of the most risky forms of lending; this statement is doubly true for commercial lenders.

There are however, some great opportunities for a knowledgeable commercial finance broker to arrange bridging finance that is not only cost effective, but will cover 100% of the actual property cost, making the capital investment for the short term an incredible 0%. Intrigued? Let's take a look at how this is achieved.

Firstly we need to consider valuation, by choosing a lender that will allow the borrow to work from the open market value of the property, rather than the actual purchase price, the loan to value amount increases, which means that the actual loan is for an amount close to what you are actually paying for the new property. Many high street lenders will refuse to work from the purchase price and refuse to recognise such things as a good deal and any possible built-in equity in the new building.

Some lenders will also allow the borrower to roll the interest into the bridging finance, which means that no repayments will be due, as they have already been added to the loan value. This is a great way to secure a property which is going to take some time to secure, as your business will not need to find hefty load repayments each month.

It should be noted that this form of borrowing is primarily aimed at those needing to secure bridging finance in the form of a closed bridge, which, means that contacts have already been signed for the property deal, those who are seeking an open bridge will find matters far less flexible and may only be able to acquire 70% of the cost of purchase through bridging finance.

Whichever form of bridging finance you are seeking, either open or closed bridge, it is highly recommended that you seek out the advice and guidance of a qualified, professional commercial finance broker, they will be able to help you with preparing the mountain of supporting documentation that will need to accompany your application, including a well thought out business plan and fully audited accounts. A good broker will also have access to a far wider range of lender, and be able to source the most effective product for your needs, they will also act as the front line of communication between your company and the lenders themselves, this alone is worth the brokers fee, as dealing with commercial lenders is renowned as being complicated and drawn out. If you wish to secure your bridging finance in the shortest possible time, you are going to need a commercial finance broker to assist you with your bridging finance application at every stage.