In business, it is common for a long-term financial path to face disruptions along the way, be it delays with applications for finance and loans, funds not being available when needed or sometimes immediate costs such as utilities, payroll and inventory need to be covered before long term financing is available. Property purchases in particular, can have unforeseen holdups with sales or refinancing due to the trail of actions involved. Rather than face frustrations in a project not moving forward or letting an opportunity slip by, a bridging loan can provide the perfect solution.
A bridging loan is typically ideal for acquisition, expansion or indeed the refurbishment or refit of an investment property. Essentially, this is a sum of money used to cover the gap between two transactions on a short term basis. The benefit of availing of a bridging loan means you have access to finance quickly (our deal below was paid out within a mere 12 days!) giving you confidence and power to move forward regardless of delays outside of your control and the short term of bridging finance means it is a temporary measure to a long term solution.
Here are our business criteria for a bridging loan:
✔ Property must be a buy to let – we do not finance family homes
✔ Purchaser must be a limited company or Special Purpose Vehicle (SPV)
✔ A term is typically 6-18 months
✔ Maximum Loan to Value of 70%
✔ Loan amounts range from €500K – €10M
✔ Property must be located in large urban towns or cities (with population of over 10,000)
✔ First fixed charge as security
✔ Residential Investment or commercial assets (no land or development)
An example of a recently completed bridging loan is a 12 month Bridging loan, Deal value €6m, Loan Amount €3.25m.
The bridging loan was required for a Property investment transaction.
The loan provided immediate required funding for the purchase of a shopping centre for 12 months, which allowed necessary capital expenditure and time to facilitate a long-term loan facility.
The funding was put in place 12 days from issuing terms.
According to the customer “The bridging solution provided by Capitalflow saved us from loosing a deal we had been negotiating on over a significant time period. By pulling out all the stops to get the finance in place as quickly as they could, the Capitalflow team helped us to complete the purchase of the commercial property within the tight deadline set by the vendor which otherwise would have been lost”
To find out more about our bridging loans, contact our team today