Bridging Loans

Short-term Secured Loans for your business.
Business Finance Team

Benefits of Bridging Loans

A bridging loan acts as a secured short-term loan. They are used to ‘bridge’ a gap between debt due. The most common use of bridging finance is within the property sector, typically in the renovation market. This product is not limited to those in these sectors, as it can have plenty of benefits acting as a short term loan in difficult financial circumstances. 

Within the home renovation industry, bridging loans can be invaluable. If you were looking to purchase a property, the chances are that unless you are extremely cash rich, you would need to obtain a mortgage. Obtaining a mortgage might take a lengthy period of time and accordingly, you run the risk of missing out on the property you would like to purchase. In addition to this, you may not be able to obtain a mortgage on the property you are looking to buy.

This might be because the property needs renovating and the lender is not prepared to lend you any funds towards this. In this type of scenario, a Bridging Loan would be an ideal solution. It would allow someone to acquire the loan amount they needed to buy the premises. For example; many people purchase properties at auction, renovate them, sell the property and pay back the bridging loan.

In times of increasing financial stress, a bridging loan can consolidate your debts and give you a structured repayment plan. As this is a short-term solution, security against an asset will have to be taken. This is only used as a safety net precaution in the case that your loan cannot be paid off.

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Eligibility

Turnover

Unless you are a new start-up company, the minimum turnover most lenders will deal with is £100,000 turnover.

Trading History

Similarly to Turnover, start-up companies can get funding. Once you have filed accounts for the year, we can then apply you as a fully-fledged trading business.

UK Registered Businesses

Due to us dealing with UK Based Lenders, we can only find funding solutions for UK Limited Companies.

FAQs

How much will a Bridging Loan cost?
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The cost of a bridging loan facility will vary dependant on the total amount of funds borrowed, the length of the loan term, and the strength of your business profile. The interest rate on bridging loans starts from around 1%.

Am I eligible for a Bridging Loan?
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Eligibility varies largely from lender to lender, with some much more flexible, some much less. The basic criteria for applying for a Bridging Loan is as follows:
- £100k minimum turnover (unless you are a new start-up)
- UK Registered Business
- Own one more valuable assets that you are willing to have secured against the loan

If you don’t meet this criteria it isn’t the end of the road, other funding options are available, and this can be discussed with one of our consultants.

How long does it take to arrange a Bridging Loan facility ?
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Due to the nature of the product, bridging loans typically take longer to process than some other products. With valuations and other meetings being involved in the process, it will typically take between 2 & 4 weeks.

How much money can I get through a Bridging Loan facility?
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Bridging Loans have a broad range of available funds. The amount you can borrow will be calculated based upon your affordability, although the minimum borrowing is £75,000, and the maximum is £15,000,000.

Why choose Spark Finance?
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We are not your average broker. We strive to find you the perfect funding facility for your business, in the easiest way possible. We designate a member of our team of specialist finance consultants to you, walking you through the entire process until the funds are in your hands.

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“Spark Finance have been incredibly helpful from start to finish. They helped secure a CBILs package even when many lenders had stopped considering new applications. They've informed us of new developments every step of the way and have helped us through this uncertain time. Nice one, guys!”

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Disclaimer: Spark Finance Ltd (Registered office - 18 John Stow House, London, England, EC3A 7JB, Registered Number 10128297) helps UK firms access business finance. Spark is a credit broker, not a lender. Any quotes provided are for information purposes only and subject to status and separate lender terms and conditions. Applicants must be aged 18 and over.  Guarantees and Indemnities may be required.  Spark Finance may receive commission from lenders  which may vary depending on the lender, product, or other permissible factors. The nature of any commission model will be confirmed to you before you proceed.

Spark Finance Ltd is authorised and regulated by the Financial Conduct Authority in the UK (FRN 958123).