If you are a developer or an investor, you’ll know more than most about how time-sensitive some projects can be. There are plenty of scenarios that you may find yourself in that require fast funding, from purchasing property at auction to meeting bill deadlines. 

At Bridging Finance Solutions, we have worked with many people requiring quick financial backing, and we have proudly helped provide fast and efficient financing to support project completion and purchases.

In this guide, we will provide more insight into how to secure fast funding and how we can provide financing as we currently do.

When You Need Rapid Bridging Finance

Those of you who are not experienced in property, be it development, selling, or even buying, may not understand why someone may require quick finance. 

It can be easy to presume that mortgages can be used in most cases, but the reality is that standard mortgages are not as flexible as you might think, so developers often depend on bridging loans to provide the necessary financial solution. 

Some examples of when you might need bridging finance include:

Auction Purchases (28-day completion)

The process of buying at auction is much faster than other purchase types. If you don’t have the funds ready, you’ll need a quick financial solution, which usually comes in the form of auction finance bridging loans. 

When you purchase a property, you have to pay off the full balance within 28 days. If you take out a standard mortgage, that financing will often not be available within that timeframe or will be rejected if the property’s condition doesn’t meet the necessary standards.

Because bridging loans can be delivered so quickly, they are the obvious choice for auction loans.

Chain Break Emergencies

Bridging loans are a fast and flexible solution that can be helpful in a chain break emergency. 

Chain breaks occur when a buyer or seller withdraws from a transaction. They can be incredibly frustrating and cause delays and cancellations, especially if you are relying on a sale to fund the purchase of your new home. 

This can be especially difficult if you have already committed to buying and no longer have the funds. In these instances, you need quick cash flow to bridge the gap between the sale of a property and the purchase of your next, and bridging loans provide a feasible solution for that. 

Business Opportunity Deadlines

Sometimes, we are presented with fantastic business opportunities that it would be a mistake to pass up, but the funding required to pursue the opportunity just isn’t in your possession. Instead of missing out on a fantastic opportunity, more and more people are turning to bridging loans to help them secure the opportunity and meet their needs.

Taking out a bridging loan just might be the right solution. You can repay your loan with any capital made from the venture. 

Repossession Prevention

Unfortunately, given the current economic climate, it is becoming increasingly common for people to face financial challenges. Often, these issues can be addressed before they escalate, but there are cases where these financial problems may lead to repossession. 

At Bridging Finance Solutions, we have provided financial assistance to a client facing repossession. We helped to stop the seizure of their property until they had an alternative financial solution, and more and more principal lenders are stepping in to do the same for their clients.

Tax Bill Deadlines

There are instances of people receiving unexpected deadlines for tax bills that they are unable  to pay. A prime example of this may come after the passing of a loved one, where their family requires fast bridging loans to finance inheritance tax.

There is a misconception that bridging loans can only be taken out to purchase or save property, but short-term finance can be a fantastic solution for avoiding late payment penalties. 

How Fast Can Bridging Really Be?

Bridging loans are known to be fast, but the exact speed of these loans differs depending on the lender. The standard timeframe for a bridging loan is around 1-4 weeks, which is substantially faster than a standard mortgage. 

Though that is the traditional timeframe, some lenders claim to be able to provide a bridging loan in as little as 24 hours, so if you need financial backing immediately, bridging loans offer a fantastic solution. 

At Bridging Finance Solutions, we have provided fast bridging loans in as little as 48 hours and as long as applicants provide the relevant information, an experienced solicitor is acting on their behalf, we are able to act fast and provide financial support.

Required Documentation for Rapid Approval

In order for us to provide financial assistance quickly, we need our clients to have the necessary documentation and preparations in place. If you are considering taking out a bridging loan, you must have the necessary documentation ready for review. 

Documentation that is often required to receive rapid approval for your bridging loan includes:

Property Details

Since properties serve as collateral for the loan, the lender must assess whether the property can be reclaimed if the loan defaults. At Bridging Finance Solutions, we need to assess the value, type, and condition of the property being used for security before we can make a decision. 

It is important for those applying for a loan to provide the following information:

• Property address
• Property type
• Condition
• Purchased price

Without this information, the application process might be delayed or your application may even be rejected.

ID Verification

In line with anti-money laundering regulations, lenders are legally required to verify your identity before they can give you a loan. Without your ID, you will be unable to obtain a loan, so to avoid any delays, you should make sure that you have your passport or driving license ready, along with any recent utility bills or bank statements that can serve as proof of address. 

Proof of Income/Affordability

Before a lender provides a loan, they must first assess whether or not the person taking out the loan will be able to repay the loan. Because bridging loans primarily require monthly interest payments, unless you roll the cost, lenders need to know that the costs can be repaid if the exit plan falls through.

When looking to prove your income, you should provide: 

• Payslips and tax returns
• Bank statements
• Company accounts, if applicable

Exit Strategy Evidence

Exit strategies are incredibly important when applying for a loan. Lenders want to know exactly when and how you’ll repay your loan before they consider providing it. This means that you have to be able to outline any plans you have to get the necessary funds, which could include any contracts you already have outlined and any evidence of agreed refinancing. 

Additional Security Options

If you require a quick loan, providing extra security options can be advantageous. Offering additional assets as collateral lowers the lender’s risk and can expedite approval, especially if your main security is uncertain or has a lower value. Doing this may also help you receive better interest rates for the loan.

Potential Challenges and Solutions

With any financing solution, there may be obstacles that derail or delay a bridging loan. Being able to recognise these obstacles will allow you to better equip yourself to overcome them. Some potential challenges that you may encounter include:

Property Title Issues

Lenders must verify that the property securing the loan has a clear and marketable title. Red flags may include issues like unregistered land, boundary disputes, restrictive covenants, or unresolved charges. 

Before applying for your loan, make sure that you have your solicitor run early title checks, and if your property is unregistered, start the process as quickly as possible. 

Valuation Complications

Bridging loans rely heavily on accurate property valuations. If the surveyor provides a lower-than-expected value or identifies structural problems, the lender might lower the loan amount or decline the application completely. 

It is important to ensure that the property’s valuation is accurate before making any application and to be up front about the condition of the property. 

Alternatively, if you realise the property is not up to the standard it should be, you could apply for a refurbishment loan to bring it up to the standard necessary to receive a larger loan. 

Legal Due Diligence Barriers

Delays in the legal process, like slow solicitors or incomplete documentation, can greatly hinder your loan approval timeline. It can be frustrating to experience delays due to the actions of others, but there are ways to ensure that this isn’t the case before you start your application. 

Make sure that you are only working with solicitors who have experience in bridging finance, or make sure that all of your legal documents are prepared early, so that you have everything that you need in place and do not need to depend on your solicitors producing the relevant documentation as the process is happening.  

Borrower Verification Delays

A common problem borrowers encounter is delays because the identification and documentation they have provided are unclear or incomplete, which means that the lender can’t proceed with the loan.

Before you consider submitting your application, you need to complete a thorough check of your documents and confirm that they are all clear, valid, and up to date. To be extra cautious, you can use a broker to pre-check your documents before submission, but this may come with additional costs. 

Get Finance Fast With Bridging Finance Solutions

Through this guide, we hope to have clarified how quickly bridging loans can be delivered and how you can offer the right support to expedite the process. If you work with your lender and provide the necessary information as soon as possible, you may be surprised to see how fast you can receive the funds for your project. 

Want to know more? Interested in applying for a bridging loan? Get in touch with our team and make it happen with BFS today.