Bridging Finance – The Super Bridge
When I mentioned this to a contact the other day their response was ‘what bridge?’ shortly followed by ‘where is it again?’. So let’s establish one thing, a ‘Super Bridge’ is not how you cross a wide river, it is the next generation of bridging finance.
Bridging finance in itself has been around for years. A bridging loan is as it says, a bridge between one thing and another. The most common use is for purchasing property, often at auction of where the property fails normal mortgage finance. The bridging loan stays in place until either something else sells or a mortgage is agreed.
Bridging finance is short term, it is solely a means to an end.
The Bridging Finance Super Bridge
Sounds funky doesn’t it? Almost celebrity like a ‘super injunction’ but sadly a Super Bridge is not quite so salacious…
This quote from Andrew Hosford of Voltaire sums up a Super Bridge;
” A short-term loan where the lender’s primary scrutiny is focused upon the underlying real estate asset and where the lender is secured via a first legal charge against the property but where the quantum of the loan advance exceeds £50m”
All fine and dandy, but why even mention a Super Bridge?
Bridging Finance In The Real World
Firstly accept that bridging finance is higher risk lending. It is lending backed by security rather than a repayment source. The lender is typically advancing where someone else is not yet comfortable to do so.
Secondly, combine that with the media saying that nobody is lending (see British Business Bank), that credit is tight and that property developers are really struggling to find funding. Then read again that Bridging Finance is growing and we are now seeing Super Bridge deals going through.
The point being that there are lenders doing these deals. For property developers, auction purchases, unusual properties or houses that lack a kitchen or bathroom (so cannot mortgage through normal mortgage lenders) then there is a solution.
More Bridging Finance Info
For the majority of people a Super Bridge will never be required. However, more modest levels of bridging finance are growing in demand and number. So if you are thinking of property development then there are certainly options out there for you.
By Dave Farmer
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