More good news came from the ASTL’s latest sentiment survey, compiled from its bridging lender members, showing that the value of bridging applications increased by 13.9% in Q1, compared with the previous quarter.
As awareness for this fast and flexible funding option continues to grow, it is clear that bridging loans are no longer perceived as a last resort lending solution. More and more people are recognising that it can serve a wide range of purposes. In fact, the days of taking out a bridging loan to fund a new home before an old one is sold has become one of the lesser uses of this specialist finance, while bridging loans are being increasingly used for property development.
In many cases, mainstream lenders don’t have the correct infrastructure to turn around a loan in the time required. There are also times when a mainstream lender has offered a borrower a debt forgiveness deal, but they’ve not been allocated the right amount of time for it to be effective.
However, with its quick turnarounds, bridging loans can provide a speedy solution for clients. Each loan application is looked at on its own merits, therefore providing the solution to help people out of a potential crisis situation. Of course borrowers must also have a clearly defined exit strategy to repay the loan, as these exit routes can allow people to take advantage of clear opportunities.
The bridging sector has seen a five-fold growth in lending since 2011 and can be used for a wide array of property development, refurbishment and commercial property opportunities. Many of which lie outside the traditional uses for which bridging finance is considered. The very nature of bridging finance is its flexibility, and therefore its ability to turn potential crisis situations into opportunities for brokers.