Bridging loans are useful for immediate cash injections when liquid cash isn't available instantly but the person has the funds to make the purchase. A bridging loan will speed up the time that the funds can be accessed to ensure that there are no delays in your purchasing, for example if you are waiting on property funds before being able to complete on the next property.
Bridging loans or bridging finance, is a great way to access cash quickly to allow you to put a plan into place to liquidise assets. They are essentially a way to ‘bridge the gap’ whilst waiting for a long term plan.
What is the most common use for bridging loans?
They are most commonly used for investment, a staggering 24% of all bridging loans are used for investments.
How to Bridging Loans work?
Bridging loans can either be first charge or second charge, first charge is when the bridging loan is the main loan on your property, an example of this would be if you had already paid for your house in full and you are using a bridging loan to complete renovations.
However, if you have a mortgage already, the bridging loan will be second charge. This is when the mortgage is the main charge on the property.
Other than property, what else can I use my bridging loan for?
Bridging finance can also be used to assist with cashflow within businesses too, if a business is waiting for a customer to pay a large invoice, they make take a bridging loan out to cover the cost for the short term whilst awaiting the payment.
They can also be used to pay off urgent tax bills such as income tax, corporation tax or capital gains tax.
Bridging loans can be very helpful for both commercial and domestic use, whether you are purchasing a property to live in or a business property. Contact the team at Pyxis Capital today for more information!
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