Source Fast Funding When Banks Are Slow To Act

Contents

• Highstreet Banks and Lenders are Slower than Usual 
• What Other Funding Options are Available?
• What is a Business Bridging Loan?
• Advantages of a Business Bridging Loan
• How Much Does a Bridging Loan Cost?
• How Long Does it Take To Get a Bridging Loan?

Highstreet Banks and Lenders are Slower than Usual

It’s well known that high street banks and lenders have become more stringent over-lending in recent years, and the pandemic has only exacerbated the situation. UK Finance data shows that just over half of The Coronavirus Business Interruption Loan Scheme Loans (CBILS) applied for have been approved, with this backlog taking up lenders’ time, how are businesses sourcing funding now?

What Other Funding Options are Available?

Fortunately, there are other options. If you need a quick injection of cash into your business, here are some solutions:

• Unsecured business loans — finance of up to £250,000 with no security. Suited to businesses with no/few assets, don’t want to offer security or need finance quickly
• Revolving credit — pre-approved funds with a rolling agreement. A good alternative to business overdrafts and often more accessible
• Bridging finance — a type of short-term business loan designed to get you from A to B until you can pay it off or secure longer-term finance

What is a Business Bridging Loan?

Business Bridging Loans are a short-term loan often used by businesses to meet their business financing requirements including raising working capital and cashflow, commercial property purchases, investment opportunities, business debt consolidation, HMRC payments, business expansion, and more. Business Bridging Loans are a supporting solution that precedes a longer-term form of funding, it is therefore advisable that you consider the exit strategy before committing to any terms. An ideal exit strategy from a bridging loan could be to approach a mortgage lender for a longer-term form of funding such as a mortgage, or a buy-to-let mortgage, and of course there is the option of simply selling a property.

Advantages of a Business Bridging Loan

• Flexible lending criteria
• A fast, short-term form of finance
• Borrowers have some control over repayment options
• Can improve credit score if repayments are made on time
• They offer a solution when high loan-to-value (LTV) mortgages aren’t available

How Much Does a Bridging Loan Cost?

Borrowers often focus on finding the lowest interest rates and make their decision based on that alone. It’s important to read the Ts & Cs as some lenders will increase the total cost by charging large exit fees, fund management costs, and other costs that might not be clear from the outset.

How Long Does it Take To Get a Bridging Loan?

Depending on various factors, a bridging loan can take anything from 72 hours to a couple of weeks to complete. It’s often not the quickest type of finance to get approved due to its complexity, but lenders are typically expert and very agile in getting the information they need. Gary Poulton, Founder & Managing Director of Finanta comments: “Whether you are a trading limited company, an SPV or applying individually, as long as you are the legal property owner, or will be once the property transaction has completed, then we can obtain the funding you require without delay.”