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Analysis: Bridging fills a gap and has come of age

Rubins

Alternative lenders are increasingly offering short-term funding when high-street lenders are closed. Like Tesco Metro or Sainsbury’s Local, they compete on availability and easy access. They fill a niche and often the difference in pricing is not as great as assumed.

After all, a bridging loan is a short-term facility for between three and 12 months and as both clearing banks and bridging loan providers charge similar upfront fees, the only difference is the interest. This can be as much as 8 per cent a year but as the loan is usually for a short period. If the discount or benefit for speed is sufficient, the extra cost is not as painful as abandoning a well-negotiated opportunity.

The approval and drawdown process of high-street banks can be endless but bridging finance provides an alternative and prevents lost opportunities. Underwriting cannot be wild and providers can be efficient, welcoming and inventive. 

We now offer loans to complete urgent purchases such as auction contracts. The industry has come of age and complements and competes with the mainstream.

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