14 July, 2024

Who is Eligible for Bridging Finance?

Assessing eligibility for bridging finance is about more than meeting the basic qualification criteria alone. Establishing affordability and comparing the options available is also essential, which is where our exclusive online bridging loan calculator can help.

Bridging Loan Criteria: The Basics

In terms of basic qualification criteria, all lenders have their own policies regarding bridging finance eligibility, however, you will be expected to meet the following basic criteria by most bridging loan specialists:

  • Assets of value (usually property) to secure the loan against.
  • Be aged at least 18 at the time of your application.
  • Residence in the United Kingdom or a registered UK address. Some lenders will take a view on this.
  • The ability to provide evidence of an appropriate exit strategy.
  • Formal proof of income and/or current financial status. Some lenders will take a view on this.
  • The intention to borrow a minimum of £10,000.

Your credit score may also be taken into account, though in most instances will not be a primary determining factor. However, a good credit score often paves the way for a more competitive bridging loan.

What Can a Bridging Loan Be Used for?

Bridging finance can be used for almost any legal purpose by both private and commercial borrowers alike. Most bridging loans are used for property development and improvement projects, where the property is used as security for the loan.

The five most common applications for bridging finance in the UK are as follows:

  1. Quicker Property Purchases – Bridging finance can be used to purchase properties at auction or in other time-critical situations, where waiting for a traditional mortgage application to be approved is not an option.
  2. Property Renovations and Refurbishments – Many businesses and households use bridging finance to conduct property renovations and refurbishments, prior to placing the property on the market to sell it at an elevated price or to refinance.
  3. General Business Applications – Business owners often turn to bridging finance to ‘bridge’ gaps in their own income or cash flow, perhaps for the purchase of office equipment, to relocate to larger premises or pay unexpected tax bills.
  4. VAT Payments – Bridging finance can also be useful for covering major VAT liabilities and enabling a business to continue operating as normal.
  5. New Business Startups – Anyone embarking on a new business venture may find the fast-access capital of a bridging loan invaluable for covering initial expenses and addressing cash flow issues.

How to Get the Best Deal on a Bridging Loan

The bridging finance sector in the UK is broader and more diverse than it has ever been. This is why it has never been more important to conduct a complete and in-depth comparison of all available options, before applying for a bridging loan.

At UK Property Finance, we operate as a specialist independent broker for bridging finance customers in the UK. We will conduct a whole-market comparison on your behalf, identify the most appropriate products to suit your requirements and provide our full support with the application process.

For more information or to discuss your requirements in more detail, contact a member of the team today.

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