Bridge Type
2009
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Bridge Type
Commercial Mortgages - Bridging Finance
Commercial Bridging Loans, also known as Gap Mortgages, are somewhat restricted within the UK commercial market at the moment following the recession. Today it is probably considered to be the most under used form of finance. Nonetheless, it is still regarded as a useful financial tool, especially to small companies that have survived the credit crunch and are looking to expand. Bridging Loans are designed as a form of temporary and short term loan to 'bridge' the gap between selling a property and buying another. Short term funding of this sort will enable the asset to be acquired whilst the client has time to organise the longer term finances. This type of finance is also ideal for the expansion of a business or even to cover temporary shortfalls in a company's finance.
Essentially, a commercial bridging loan is a very short term mortgage and, like other mortgages, it needs to be 'secured' over property. If the loan is to be used to expand/refurbish business premises then it will be secured over that commercial property. On the other hand, if the loan is being obtained by someone who is hoping to develop a new commercial project, then the loan is usually secured over the residential property of the borrower. Similarly, commercial bridging loans can be secured on most types of business property including freehold and long term leasehold properties as well as commercial investment properties. Developers and investors have been using bridging loans for years to take advantage of market conditions or undervalued assets.
The amount of money that can be obtained for an advancement of this type is usually up to 60% of the property's open market value and generally has a short designated repayment term of up to 1 year. Typically, loans of this type can be obtained for 10,000 up to 5,000,000. As this is a short term loan, the less capital you require, the better, in order to ensure that you can meet the repayment terms with little problems. Furthermore, the credit repayment plan can be rolled up for the term of the loan. A business bridging loan charges much higher interest rates (around 12-15%) than most traditional advances due to the speciality nature of the credit and the repayment terms are usually interest only. As a result of the recession lenders are much more restrictive with which businesses they are willing to invest in. They often require proof that the transaction will be financially beneficial to them.
Bridging loans can be obtained for commercial or residential property with or without planning permission. As mentioned above, a commercial bridging loan can be used for various things from business funds, to property development to initial land purchase and property refurbishment. However, commercial bridging finance is most frequently used when purchasing property at auction and quick capital is necessary to secure the sale. Normally, a bidder has around 4 weeks to complete the purchase from the day of auction and a 10% deposit is usually required. This deposit could be lost if you are unable to get the funding in place, so a bridging loan is recommended to complete the auction transaction. Being able to complete the purchase of the property quickly ensures that you beat others to the deal whilst also negotiating the best deal.
Bridging loans are also very practical and quick for companies who do not want to be locked into a long term credit agreement and who are seeking to raise money on their commercial premises. It gives them the advantage of being able to repay over a short period of time. A bridging loan is designed for short term finance secured against property in place of a term mortgage or conventional mortgage which would take too long to arrange or where the property itself would not form good security for the lender for mortgage purposes. Some small businesses have no other choice but to obtain a bridging loan to avoid bankruptcy, repossessions and clean up mortgage arrears. Bridging is much quicker to arrange than a normal residential mortgage, on average taking 3-5 days from first enquiry to completion, providing all the formalities and legalities are dealt with efficiently by the borrower. It is important to know that bridging lenders look for speed and will not hesitate to pass up your opportunity if you do not provide them with the correct information in an efficient manner. The bridging finance market is a very small place and lenders will happily go elsewhere with their money, no matter how big the profit margin is!
About the Author
This article was written by financial expert Timothy Frodsham. Tim works for
http://www.justcommercialmortgages.com
who specialise in finding the best
commercial mortgage rates
for all their customers.
Is the truss bridge the most sophisticated type of bridge that structural engineers design?
no, to name a few, there are truss bridge, trestles bridge, arch bridge, trussed arch bridge, box girder bridge, suspension bridge, and cable stay bridge.
there are concrete bridge, prestress concrete bridge, steel girder bridge, steel box girder bridge and generally, bridges make out of steel.
there are bridge with riveted connections and bridge that are welded together in the form of moment connections.
there are flat slab stone bridge, arched stone bridge, masonary bridge and bridge makes out of wood.
KEYSHIA COLE TYPE INSTRUMENTAL WITH BRIDGE
