Types of Bridging Loans
A Commercial Bridging Loan is short term loan secured against a commercial property. They can be against any type of commercial property and are a fast way to release equity in or help purchase a commercial property.
Bridging Loans are a quick and flexible way to borrow money regardless of an existing mortgage charge. They look at the underlying security, what you intend to use the money for and their exit. As such they can be secured by a 2nd or 3rd legal charge.
Unlike most commercial finance brokers Oakmead Finance is authorised and regulated by the FCA meaning we can conduct Regulated Bridging Loan where a bridging loan is secured against your home residency.
Where a property is being purchased and is in need of either cosmetic (light refurb) or more in depth structural changes (heavy refurb) a bridging loan is the fastest and simplest way of providing the funds required to complete the work.
Short term property development bridging loan finance for residential or commercial developments. They can include or exclude the initial land or property purchase and the loan is released in stages through out the build.
Residential Bridging Loans are a quick and easy way to either release equity tied up in the property you live in, another property you own or to help fund a new property purchase where you cannot wait for a traditional mortgage.
If you are a developer accessing cash is vital to securing opportunities. Our Developer Bridging Loans offer a revolving credit facility to draw down as and when you need without waiting for a decision or formal offer.
Auctions require you to complete within 28 days of the auction sale which is too short a time frame for a traditional mortgage to be arranged. Auction Bridging Loans allow you to purchase at auction while a more traditional mortgage is agreed.
Bridging loans don’t have to be secured against property. Any asset with a value can be considered. Cars, paintings, watches, precision metals and fine wine are all examples of the assets that we have arranged fine secured against.
Uses of Bridging Loans
Bridging loans can be used for many different purposes.
Common uses are:-
- To enable quick purchases (residential, commercial or land)
- Short term business/ cash flow funding
- Property refurbishments/developments
- Property auction purchases
- Paying HMRC bills
- Re-financing existing bridging loans
- Rates from 0.44% per month.
- Interest can be retained, rolled, serviced or a combination of these options.
- Up to 100% LTV available (subject to additional security).
- Terms from 1-24 months.
- Loans from £100k to £20m.
- 1st, 2nd or 3rd charge lending.
- 2% Arrangement Fees.
- No early repayment or exit fees.
- Initial factfind performed by Oakmead.
- Oakmead will obtain terms from a number of lenders that best fit your individual profile.
- Indicative Offers presented to Client.
- Client discusses Offers with Oakmead and decides on which Lender to proceed with.
- Oakmead obtain quotes for valuation and solicitors (if required).
- Client pays valuation fee and the valuation is instructed.
- Client pays legal undertaking with chosen solicitor.
- Legal work begins.
- Valuation is received and formal offer is made.
- Legal work concludes and the loan completes
- Loan size required
- Use of the funds / reason for the lend
- Address and description of property(ies) on offer as security
- Estimated value / purchase price of the property(ies)
- Details of any current loans secured against the property(ies)
- Loan term required
- Proposed exit (repayment of the bridge)
How Oakmead Finance can help
Our team of commercial finance specialists have years of experience in structuring bridging loans. Whatever your requirements, we will use our relationships with specialist bridging lenders to organise a bridging loan for you, quickly and with minimal hassle.
Contact us to discuss your requirements with one of our team and explore the options available to you.
Case study 1
We were contacted by one of our existing clients who owned the freehold of a mixed-use property in London. The property, which had a high end fashion retailer on the ground floor and a duplex flat above, was valued at £4m. To further reinvest in his own business, the owner was seeking a buy to let refinance of the flat, which was valued at £3m.
However, just after the buy to let mortgage had been completed, the client received an unexpectedly large tax bill. Because of this, he now not only needed to finance his business’ growth plans, he also urgently needed to raise further finance to fund his tax bill too.
Fortunately, our commercial team have well established relationships with reputable bridging lenders. This meant we were able to secure the funding quickly and hassle-free.
After one call to the lender, we were able to agree a deal which structured the facility by taking one charge against the freehold property and a second charge against the flat. In total, we were able to raise £350,000 for our client.
Bridging loans are very relationship led, and are based on reputation and trust in the marketplace. Prior to approaching us, our client had spoken to another broker who had informed him, he should expect an interest rate of 1.5% per month. However, due to our relationships in the industry, we were able to secure an interest rate of 1.15% and provide our client with a significant saving.
Proving how quickly bridging loans can be turned around, the deal was completed within 2 weeks of the initial enquiry and allowed our client to pay his tax bill in a timely manner.
“Fantastic service. I have been using Oakmead Finance for a while now. They are professional in their dealings, as well as being honest and open.
Mr. Jenkins – Property owner
Case study 2
We were approached by a client requiring finance to be raised on a substantial residential property with many acres of land in the south west of the UK.
The borrower was in a poor financial position. His incumbent lender had called in his loan and had begun marketing his property for sale, whilst exerting significant pressure on him. A short-term bridging loan was required to allow our client to repay his existing lender and provide him with enough breathing space to allow him to tidy up his affairs.
Despite approaching several other brokers, he had not been able to get funding elsewhere and to a certain extent, the deal had started to get a bad name in the industry – this can happen when a lender sees one deal from a variety of sources and it is presented in slightly different ways.
By leveraging off of our reputation with select lenders, our commercial finance team brought in a reputable lender to assist in a very short space of time. We were able to secure a bridging loan at 12% per annum based on the LTV, quality of the asset and the background circumstances of the transaction.
As part of the deal, we also negotiated to write off £150k from the existing lender’s loan, as we were in a position to provide the funds needed to repay them without the need for further, lengthy marketing of the property. This action stopped the forced sale and allowed the client time to regain control of his affairs.
“The professionalism and dedication of Oakmead Finance to secure funding for us, when we had been turned down on numerous times by other brokers, cannot be understated. We are truly thankful to Peter and his team”
Mr Jimenez – owner
Oakmead Finance Ltd is a company registered in England & Wales with company number 09478864. The registered office address is Lynwood House, Crofton Road, Orpington, BR6 8QE
Think carefully before securing other debts against your home. Your property may be repossessed if you do not keep up repayments on your mortgage.
Some Bridging Loans are not regulated by the Financial Conduct Authority.