In the midst of a real estate transaction, more often than not you will require fast access to funding, whether for securing a property at auction, bridging a gap between property sales, or financing a commercial project.
That being said, a short term financing option such as a real estate bridging loan provides a short-term financing solution designed to meet these urgent funding needs.
What Is a Real Estate Bridging Loan?
A real estate bridging loan is a short-term financial option that is designed to provide quick funding to property buyers and investors. Unlike traditional mortgage loans, which involve lengthy application processes and strict affordability checks, bridging loans are secured against the property itself as collateral, allowing for much faster approvals and payouts.
These loans are typically used in scenarios where immediate capital is needed, such as purchasing a new property before selling an existing one, financing a renovation or refurbishment, or seizing an opportunity at auction.
“What is the repayment period of a real estate bridging loan?”
The repayment period usually ranges from a few months to two years, as remember, this is a short term option, making bridging finance the ideal solution for property professionals and businesses.
MS Lending Group specialises in providing tailored bridging loan solutions for commercial, residential, and semi-commercial properties, ensuring clients can secure funding for their real estate projects without delays.
How Does a Commercial Real Estate Bridge Loan Work?
A commercial real estate bridge loan functions as a temporary financing solution to bridge the gap between property acquisition and securing permanent funding, like a longer term mortgage for instance.
Typically, these loans are used by property developers, investors, and businesses looking to purchase, renovate, or refinance commercial properties.
The process begins with an application, wherein the lender assesses the value of the property being used as security, the exit strategy (such as selling the asset or refinancing with a long-term lender), and the borrower's overall financial position. Once approved, funds can be accessed quickly, often within days, allowing investors to capitalise on time-sensitive opportunities.
With MS Lending Group, borrowers can access bridge loans for commercial real estate with competitive interest rates and flexible terms, ensuring their short-term funding needs are met efficiently while working towards their long-term financial goals.
Advantages of Utilising Real Estate Bridging Loans
There are several key benefits to using a real estate bridging loan, making it an attractive option for property investors and developers in the UK. The key benefits of real estate bridging loans include, but aren’t limited to…
Speed of Funding
Flexibility
Modern day loan terms
Less focus on credit history
Bridging loans help investors new and old day in day out, it provides the opportunity to capitalise on the likes of auctions or other competitive bidding wars as you can pose as a cash buyer.
An Example of Real Estate Bridging Loan Use
If you’re unsure whether bridging finance is for you, then take an example situation.
Consider a property investor looking to purchase a commercial real estate unit at auction. The auction terms require completion within 28 days, but securing a traditional mortgage would take much longer. In this scenario, the investor could take out a real estate bridging loan for commercial real estate, allowing them to complete the purchase within the required timeframe.
Once the property is acquired, the investor can either refinance the loan through a long-term lender like a mortgage from a bank or sell the property for a profit, you may also know this as house flipping. Then, using the proceeds from the sale the bridging finance can be repaid.
Bridging Loans for Real Estate Vs. Other Lending Options
When comparing real estate bridging loans to other financing options, there are notable differences that make bridging finance a preferable choice in certain situations.
The key loans in the financial industry and the advantages of bridging loans against such include:
Bridging Loans vs. Bank Mortgages: Traditional mortgages require extensive paperwork and long approval times, making them unsuitable for urgent property transactions. While they can still be a good option, a bridging loan can help buy you time so you don’t miss out on property deals.
Bridging Loans vs. Business Loans: While business loans can be used for property investment, they often come with stricter lending criteria and longer approval times. Bridging loans are a more efficient way to fund immediate real estate opportunities and again, capitalise on time sensitive opportunities, particularly in highly sought after areas.
Where to Get a Real Estate Bridging Loan
For those looking to secure a real estate bridging loan, choosing the right lender is essential. MS Lending Group is a trusted provider of bridging finance solutions across the UK, offering a wide range of loan options, including commercial, semi-commercial, residential, HMO, land, auction finance, and day rate bridging loans.
Our expert team provides tailored finance solutions to meet your property investment needs, ensuring fast approvals, flexible repayment terms, and competitive rates. Whether you require a bridge loan for commercial real estate or need funding for a residential capital raise, MS Lending Group can help you achieve your property goals.
For more information, explore our full range of services or speak to one of our bridging finance specialists today.
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