March 10th, 2015.
The Guide to Bridging Finance for Land
When it comes to making land purchases quickly, bridging finance can be your best friend. This is a specialist product that allows you to quickly snap up property in circumstances where you may otherwise have to wait longer periods of time to achieve the financing you need.
Bridging Finance for Land
An important use for bridging finance is the acquisition of land. There are many reasons that this type of finance may be used, not least for the speed of the process. Land in prime development areas can go very quickly, so it is important that you are quick off the mark. It may take a long time to go through the traditional financing process, in which time you risk being gazumped or losing the property to another potential buyer.
In addition to this, when buying land using bridging finance you aren’t subject to the same demands as traditional long term finance. This means that you can make the purchase regardless of whether there is existing planning permission, utilities or access to the premises. Bridging allows you to purchase the land and make any changes or apply for permissions that you need for traditional finance.
Things to Consider Before Applying for Finance
As with any type of finance it is important to know what risks are involved before you agree to the contract. Every lender will have slightly different terms and conditions, interest rates and will require different guarantees from you. Make sure you thoroughly check the contract to ensure that Bridging finance is the right option for you.
Bridging is a short term loan, which means that they have significantly higher rates than a traditional mortgage. This means that you need to have a strong exit strategy in place to take over from the bridging loan in the soonest possible time.
How Much Can I Borrow?
Bridging finance is very flexible and the amount you can borrow will depend strongly on the land you wish to buy, your financial circumstances, and the restrictions of the lender. Typically though, the minimum amount for a bridging loan will stand at around £10,000 with the maximum value varying depending on lenders with many stopping around the 1 million pound mark.
If you want to get the perfect bridging finance deal for you then talk to Pure Commercial Finance today.
We have a wealth of industry connections and experience in acquiring bridging loans for a wide range of purposes. Call us on 02920 766 565 to find out more about what we can do for you.