Business Bridging Loans: All You Need to Know
What is a bridge loan for business & how do they work?
Bridging loans for business purposes are specialist financial products designed to help “bridge the gap” between two transactions. Usually, this involves property investment, but you can use our business bridging loans for a range of purposes.
What can a business loan be used for?
You can use our business bridging loans for varying types of property investment. This includes buying new residential or commercial properties, refurbishing existing spaces, getting conversion plans underway and more.
But you can also use our bridge business loans to capitalise your firm’s future. The funding we’ll provide you with, secured against an existing property, can be used for whatever business goals you have.
Perhaps you need to upgrade your machinery? Maybe you want to fund a recruitment drive, or use a bridge loan for a business acquisition? Our short-term funding may be able to help with all these plans and more.
What types of business bridging loans are there?
Many of our specialist products can be utilised for business bridge loans. This includes residential loans where a corporation is purchasing, developer exit finance, permitted development bridging loans, and various other loans, dependent on the circumstances.
We can provide you with finance for a range of scenarios. This includes light development finance, through to auction loans. If you’re coming to us as a business looking at making changes to an existing property, you may want to use a light development loan to spruce up your asset. An auction may allow you to find a new manufacturing hub for your expansion plans.
We’ll be able to take your individual circumstances into consideration, and provide a business bridge loan tailored to you – just contact us to discuss your requirements.
Will my business need a bridge loan?
If you’re planning to expand, be it through property purchases or investment in your business, you may find restricted options that work for you on the high street, especially if your requirement is not considered to be ‘mainstream’.
Our bridge loans for businesses take not only your personal circumstances, but also the wider economic climate into consideration when assessing a claim. Therefore, when the banks tighten their criteria, we will still be lending. We do not shy away from difficulty.
Can I use bridging for my foreign business?
Yes, all our finance options can be used by overseas investors. Applicants are considered from any country, baring sanctioned or blacklisted states.
We can also work with a range of offshore corporate setups. This includes basic structures, such as LLPs, through to complicated arrangements, including Special Purpose Vehicles (SPV) and British Virgin Island (BVI) businesses. However, the property must be situated in England or Wales.
What can be used as security against business bridging loans?
Our business bridging loans require a property to be used as a security. This will take on the form of a first or second charge loan against a residential or semi-/commercial asset. When assessing your claim, we’ll need details on the property being used as the security, along with your personal details.
Can I get a bridging loan as a small business?
Yes, businesses of all sizes can come to us for support. What’s important to us is understanding how the funding will be used, what the exit strategy entails, and how your plans fit in with what’s going on in the wider economy. Furthermore, our minimum loan amount is £100k.
Pros & cons of a short-term funding options
Short-term business bridging finance can provide you with capital quickly. This will give you with peace of mind through many scenarios. Maybe you’ve spotted an opportunity that won’t stick around for long. Or, an unexpected cost has emerged, which will need to be covered before you move forward with any business plans. We can have funding issued in as little as three days, allowing you to progress without delay.
Our loans are also bespoke. They can be tailored to suit your specific needs and circumstances. No matter how complex your situation, we’ll work to find a solution. This includes complications which may make it difficult to attain finance on the high street.
We can lend to those with defaults, liquidations, and CCJs on their record. We do not stick to a tick-box lending criteria. We’ll look at more than your finances when assessing your claim. Your business acumen, external assets, and the wider market will all be taken into account to get the deal over the line. We look for reasons to lend, as opposed to finding excuses not to.
As we underwrite from day one, you’ll never be hit by hidden charges. Your costs will be based on your specific deal, allowing you to proceed with confidence.
How does the business loan calculator work?
Our business finance calculator works in exactly the same way for individual property investors as it does for businesses. You’ll just need to enter a few basic details on your investment plan. Such as a property value, the loan amount required, and the length of the term you’re looking for.
Our calculator will calculate what a bridge loan may cost you. You’ll be able to understand how much you can borrow, what you’ll need to pay back, and whether we’ll be able to provide you with the finance required.
There are several factors that can change how much money you can borrow, so it needs to be remembered the results will only provide an estimation. To get exact figures, you can call our underwriters to discuss your circumstances.
Can I use a business bridge loan to consolidate debt?
Yes, although how this works will depend on your situation. For example, your business may own a portfolio of properties, with multiple charges already spread across them. If you want to consolidate all these payments, you may be able to use our business bridging finance to cover them, creating a single point of focus.
Are there any differences between business, and individual bridging or property plans?
There are few differences between a bridging loan for an individual or a business from an MFS perspective. We always look at any enquiry with a fresh set of eyes, taking each case on its own merits, and looking for ways to lend.
How much time does a business bridge loan take for approval?
We can have short-term business bridge loans issued in as little as 3 days. On average, we find most deals are completed in around 2 weeks. How quickly your case progresses will depend on your specific circumstances.
The more details you can give us upfront, the quicker we’ll likely be able to issue funding.
I want to repay the business bridging loan within 12 months, will that be acceptable?
Yes, our business bridging loans are short-term products with term lengths ranging between 3 and 24 months. If you want to repay your loan within 12 months then the Underwriter will factor that in to the structure of the deal.
Also, we have a free-to-use bridging calculator available which will allow you to see how differing term lengths will affect your costs. This interactive tool will allow you to factor in many potential ways to repay the loan, and plan for the future.
In terms of paying off the loan, I want to work with other lenders for the exit strategy, is that ok?
When it comes to an exit strategy, you have multiple options available to you. Paying off the loan can involve a cash settlement, selling a property on, or refinancing onto a long-term financial solution – which can be done with external lenders.
Internally, you may also be able to refinance onto our one of our buy-to-let mortgages. Your business may purchase a residential property, clean it up, and then look to rent out the space to tenants for example – our mortgages could facilitate that.