Bridging loans offer a versatile and dynamic option to finance your property projects quickly and efficiently. In this blog, we'll explore how bridging loans work and how they can enable you to seize opportunities in the property market.

Understanding Bridging Loans

Bridging loans are short-term financing options designed to bridge the gap between the purchase or renovation of a property and the eventual sale of the property or securing long-term financing, such as a mortgage. These loans are typically secured against the property itself, providing lenders with a level of security while offering borrowers the flexibility they need.

Speed and Flexibility

One of the key advantages of bridging loans is their speed and flexibility. Unlike traditional mortgages, which may involve lengthy approval processes, bridging loans can be secured quickly, often within days. This rapid access to capital enables borrowers to capitalise on time-sensitive opportunities, such as purchasing properties at auction or securing development sites before they are acquired by competitors.

Tailored Terms

Bridging loans offer tailored terms to suit specific needs and circumstances. These loans typically have terms of up to 24 months, providing borrowers with the flexibility to structure the loan according to their project timelines. However, it is important to note that bridging loans are typically more expensive in terms of interest accrual and fees due to the specialist nature of the product.

Versatility Across Property Types

Another advantage of bridging loans is their versatility across different property types and uses. Whether you're investing in residential properties, commercial developments, or industrial assets, bridging loans can be utilised to fund a wide range of projects. From buy-to-let properties to speculative land acquisitions, bridging loans provide the financing flexibility needed to support a range of different property types.

Additional Considerations

It's important to note that bridging loans can be provided for various purposes, including property purchases, refinancing, or capital raises (also known as equity release). Furthermore, while there is typically a maximum loan-to-value ratio for bridging loans, usually around 75%.

Unlocking Opportunities

In summary, bridging loans offer a powerful tool for property investors and developers to unlock opportunities and realise their investment goals. With their speed, flexibility, and versatility, bridging loans enable borrowers to navigate the property market with confidence, seizing opportunities as they arise and maximising returns on their investments.

Whether you're a seasoned investor or a first-time developer, a bridging loan from Onyx can provide a flexible option to enable you to achieve your objectives and capitalise on opportunities in the dynamic world of real estate.

For example, we recently provided a new borrower with a £535,000 bridging loan, to refinance an existing loan over 3 commercial units in Kent, all of which have leases and tenants in situ. The existing loan in place was due to expire, so Onyx stepped in to provide a new loan term of 2 years with a 1-year option to extend, with interest being partially serviced on a monthly basis, to assist the borrower with their cashflow requirements.

Onyx Property Finance are experts in providing financial solutions for property developers. We are dedicated to keeping on top of market trends and ensuring our customers are kept informed of any changes that might affect their borrowing, projects, and investments – see our blog for all the latest insights.

Speak to an expert today and get up to 100% of your purchase and build costs with fixed interest rates for the lifetime of your loan: info@onyxmoney.co.uk.