bridging financeBridging loans have been rounding up the business financing sector for the past years and for good reason. The said interim financing method that also doubles as a stop gap measure allows individuals or even companies to provide for their short term liquidity requirements should their long term funding be unavailable or is only yet to be made available.

If you are not well familiar with bridging loans then today must be your lucky day for we are going to list and drill down the major characteristics that set it apart from other credit and funding methods in its circle. Let’s begin, shall we?

1st Characteristic: SHORT TERM

Bridging loans are first and foremost short term in nature. In other words they only cater for immediate needs that span for a brief period of time like weeks to months. This is unlike traditional forms of credit such as a mortgage and a bank loan which will cover years, often ten or more, within its time span.

2nd Characteristic: IMMEDIATE

The processing for a bridging loan is relatively fast and you will not have to wait up for weeks or months to get an approval and for the cash to be released. This is why it is the perfect fit and funding method of choice for immediate needs such as a down payment for a property acquisition or legal costs attributable thereto.

3rd Characteristic: EASY

The application process is likewise easier and faster. There won’t be any need to go into all the trouble of providing for every document imaginable. This is a huge relief considering that much of the length of applications tend to be caused by all the requirements required by financial providers of other financing methods.

4th Characteristic: UNRESTRICTIVE

Users are given the liberty to use the funds as they please and as they deem necessary. This is because bridging loans are not restrictive unlike a bank loan for example which will specify the exact expense and the amounts that you should use it for. This is an advantage in such a way that users have more flexibility and freedom in its use; however, discipline must come with it so you don’t end up misusing the funds you just received.

5th Characteristic: FLEXIBLE

The payment method for bridging loans is very flexible. Borrowers have the option to close it even before maturity or at maturity once the long term financing has become available.

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bridging loansProperty bridging finance has long been used by both individuals and entrepreneurs to help fund their short term requirements in the pursuit of an asset acquisition. It has been dubbed as the interim financing method that helps eradicate opportunity losses and helps in the smooth sailing purchase of residential, commercial and industrial properties. But just like any other financial option out there, there are a number of ways to benefit and detriment from them. You want the former of course. So how do you make property bridging finance work to your advantage?

First off all understand what it is. You cannot use it properly and accordingly unless you know exactly how it functions, its terms and conditions, its slew of pros and cons and how it can help you or your business. Think about it this way. If you don’t know how to drive a car, what will be the use owning one?

Second, understand your needs. It is not enough to know what property bridging finance is and then fail to recognize your needs. Both of them have to match not otherwise. To do that you must analyze and understand the gravity and depth of your financial necessities. Is it short term or long term? How much would it be? When will you need it?

Third, only transact with trusted providers. It is your job and responsibility to see to it that you only borrow from trusted quality driven property bridging financiers. You need to canvass, ask around and inquire about their services and the quality of their services. You will read reviews and feedbacks from past and present customers. You will get to know them and you must pick the best among the heap.

Fourth, see to it that you only use it as should be. Property bridging loan is designed to provide for short term needs and must therefore be used as such. You should not in any way use it as replacement for your permanent long term loans and mortgages as they are not made to do that. It will not end well.

Fifth, always have your exit mapped out. Be sure that you have planned and devised a means on how you will go about paying the property bridging finance that you have taken out. Luckily for borrowers, repayment is flexible which can either be done before maturity or upon maturity or when your permanent financing source has come through whichever works best for you.

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