Commercial bridging finance on the increase
Property transactions will always continue to be the main business for bridging lenders but we are seeing more and more different uses. In the past six months we have seen an increase of over 50% in lending to companies and individuals looking to use short-term finance for something other than property purchases.
History has shown there will always be a place for fast short term funding whether it be a rising or falling market place. Short-term lenders are now even seeing an increase in high-street bank referrals, as the banks continue to ignore this type of financing. Bridging finance companies once were considered competition to banks but not any longer it would seem.
Bridging finance is now being recognised by banking advisors as complementary to traditional long term finance. Advisors are recommending bridging to businesses going through takeovers or mergers, as it’s often necessary to raise capital very quickly.
The same applies to management buy-ins or buy-outs, funding can be raised rapidly based on the existing business’s balance sheet or directors assets. This will allow time for longer term funding to be put in place.
The last few years have been very challenging for many businesses, bridging has provided a lifeline in many cases. Whether it’s to deal with cash-flow issues or pay a tax bill, the speed and flexibility which bridging finance offers can make all the difference.
If you need any assistance with your business or commercial funding please do give one of our experts a call, we will be happy to assist in any way we can.
Bridging Loans continue to grow rapidly
The bridging loan industry has seen massive growth over the past few years, given it used to be a much less visible sector of the lending market.
The facts are the bridging loan market grew by 24% in 2014, with the total size of the sector reaching nearly £2.5 billion. What is even more astonishing when you realise that the bridging finance industry has nearly tripled in size over the past four and half years.
2015 is following the same trend with loan applications and completions up 9.5% on January 2014.The rate of growth is now slowing down somewhat, which is understandable as greater awareness of the industry and the options it provides is now clear to existing clients. The vast majority of high street banks still continue to show a reluctance to lend on new developments so bridging finance has provided an invaluable resource to those looking to secure finance for their projects.The industry’s huge growth shows investors have become aware of the ways bridging loans can help their business grow. This type of funding is so quick to complete in the majority of cases we have seen investors return again and again for funding.
As the bridging sector continues to build on its successes, we are seeing lenders producing more new products to assist the investor. These are indeed very exciting times for bridging finance as the industry looks forward to 2015.
If you require more information of how bridging finance can help you please call us and we will be happy to assist.
The value of bridging finance is growing
The UK has seen a significant upturn in the property market in the last twelve months and is set to continue into 2015. Every month, figures from the CML and the Bank of England reported an increase in both lending and house purchases. This has followed through to bridging and commercial lending and there is a significant and growing demand for bridging finance across the UK. The Association of Short Term Lenders reported recently that bridging and short term lending is up by 41 per cent, year-on-year and is still rising in 2015.
Demand is strongest in London, but we have seen an increase in demand for loans across the whole of the UK and into many cities in Wales. Most of the demand has been from developers looking for finance to expand their property portfolios, or to redevelop existing property. For this type of borrower, mainstream borrowing does not fulfil their needs and they are looking to bridging finance to fill the gap.
As property prices rise year on year, many developers feel a sense of added urgency to buy the property they have sourced as quickly as possible, before prices rise further or before it is bought by another interested party.
Baring this in mind, not many mainstream lenders can turn the request around quickly enough and often they are just not prepared to lend on this sort of development. This is where more bespoke, specialist, bridging lenders can look at each loan request on an individual basis and still turn the application around in days, rather than weeks. Call us now if we can be of assistance to your growing business.