Bridging finance is not right in every scenario, and it is more expensive than traditional lending: we don’t shy away from this. If you are unsure of the benefits or if it is something your client should explore, get in touch. We are happy to talk to you about how our loans work and explore transparently if it could be feasible and beneficial to your client.
Cost is always important, but it can be helpful to know that it is rarely the only consideration for borrowers. Other influencing factors can include:
Using bridging loans/liquidity finance is a much faster way to access capital than is possible with conventional debt (i.e., bank lending). This means it can be a great option if your client needs capital quickly to solve a problem or move ahead with a project.
Faster than selling assets and future appreciation costs
It can be more advantageous in the long-term for your client to use a bridging loan than it is for them to sell assets to generate the capital they need. Assets and investments can appreciate over time, and your client can lose out on the upside of this if they don’t retain ownership of them. Selling assets can, in some cases, also create liabilities that are either hard to pay off or that amount to more than the loan cost without also benefitting from the upsides of retained ownership.
The cost of the loan can be significantly less than losing out on a project that will offer a great ROI opportunity for your client. Here, it can be easier to understand how the numbers work if your client knows what they are likely to gain in figures from investing in an opportunity they need capital for. Borrowing can be significantly cheaper – if your client encounters a scenario where this may be a possibility, let us know: we can explore the costs of a loan with you to compare.
Moving ahead with a project now versus later
Sometimes a client will not have the capital they need to invest in a project available to them now but being able to do so quickly can have a distinct upside versus investing in the same project later from a financial or practical perspective.
We are set up to lend £1 million – £10 million at pace. We can take a holistic view of lending, and although we want to see a great borrower and a great asset, we can often consider more factors than traditional lenders to support a lending application, provided the numbers add up and it’s a quality loan. Bridging can offer a smoother application process that is easier to manage and less complicated than arranging a conventional loan. In some cases, borrowers and their advisers approach us because lending quickly in the most streamlined and efficient way possible is a priority. Here, the relative ease with which it is possible to arrange bridging finance is often a real draw.