Renaming bridging loans would boost understanding

As outlined in a recent column (Mortgage Strategy February 26), Andy Moody deserves strong industry support for his campaign to rename bridging loans ‘short-term funding’. This describes the most important function of such loans much more accurately.

Perhaps even better would be ‘express short-term funding’ because the fast delivery of funds is just as important as the length of the loans – especially when loans are needed to purchase properties in deals that are intended to make borrowers a profit but which mainstream lenders would not consider.

Normal examples cited include dev-elopment properties, those bought at auction and buy-to-lets. Many more could be added including buying undervalued properties in quick transactions, buying land to build on, re- financing to raise capital for buying other properties and investing in commercial ventures.

Less than 20% of our business is in the traditional area of residential property sales and purchases where borrowers need short-term funds to buy new properties.

The growth area is in entrepreneurial property dealings whereby the availability of short-term funds needs to match borrowers’ needs for fast delivery, transparent terms and no onerous tie-ins.

Once brokers understand the power of short-term funding they will greatly increase their capacity to turn client enquiries into sales.

One minor correction – Moody says rates on short-term funding start from 1.4% monthly. This is incorrect as our rates start from 0.75% monthly.

John Maclean
Managing director
Link Lending
By email