Bridging Loan Case Studies
Here are some examples of how a bridging loan has been used to buy properties, land and businesses…
Auction house purchase requires a quick bridging loan
Mr Lewis attended a property auction, looking for a bargain house to buy and then rent out as a buy to let investment. He found the ideal property, placed a bid on it and won. He was given 4 weeks to complete on the purchase or risk losing his deposit.
Even though Mr Lewis already had a number of properties, he was unable to raise sufficient funds from them to complete the auction purchase and his residential lender could not help in such a short timeframe. With only a week left before the deadline, Mr Lewis took out a bridging loan against the auction purchase and the funds were in his bank account within a few days. The bridging loan allowed Mr Lewis to purchase the property and let it out whilst going through the process of finding an alternative buy to let lender.
Property developer purchases ideal plot of land
A seasoned property developer, Mrs Mills, found an ideal plot of two acres on which to place her next development of houses. As she had not completed the sale of all the properties on her existing development, she did not have all the funds needed to purchase the plot and her traditional development funder would not allow two projects at the same time.
Mrs Mills could not risk losing the plot, as she had negotiated a substantial discount, so sought quick funding in the form of a bridging loan. The money was with her within a week, allowing her to purchase the land. She has since used bridging loans to purchase numerous plots in this way and finds her development business grows a lot quicker because of it.
Business needs a short-term loan to help cash-flow
Business owner, Mr Phillips, was running a growing business but found himself in a cash-flow issue and needed to raise some short-term money to cover the staff wage bill while payments for outstanding invoices came in.
Mr Phillips did not own the commercial premises from which the business traded, though he did have a residence that was virtually mortgage-free. A bridging loan was secured against his residence and allowed him enough money to comfortably pay his staff whilst sorting out his cash-flow issues. Within a month, Mr Phillips was able to pay back the bridging loan and the business has since continued to grow nicely.
Quick below market value property purchase
Travel agent, Mr Evans, found the ideal commercial premises from which to run his company. The property had only just come on the market and Mr Evans negotiated a substantial discount, meaning it was well below the true market value.
Needing to complete before the seller changed their mind, Mr Evans took out a bridging loan, secured against the commercial property itself, putting the money in the vendor’s account within a week. Mr Evans moved his business into the property and then took out a commercial mortgage to repay the bridging loan. The new property is now acting as a pension for when he retires.
Do any of these situations sound familiar? If you need a quick bridging loan then fill in our online enquiry form and our team can start searching the market for you. Alternatively, call us on 029 2069 5938 and we will be happy to run through your options.
