What can bridging finance be used for?
Bridging finance can be used for a variety of reasons, in this article, we will outline some of the most common uses for it.
What is Bridging Finance?
Bridging finance is a short-term loan that helps to cover the gap between two longer-term loans. It can be used for a variety of purposes, such as real estate, business expansion, and debt consolidation.
For a more detailed review of bridging finance and bridging loans read our article here.
Purchasing an auction property
Bridging finance is a great option for those who need to act fast on an opportunity. For example, if you are looking to purchase a property at auction, you may not have time to arrange traditional financing.
Bridging finance can provide the funds you need in a shorter timeframe so that you can take advantage of the opportunity.
Here at Cap Ex Tax Associates we specialise in completing Auction transactions within 28 days as per auction requirements.
Purchasing a property before yours has sold
Bridging finance can be used to purchase a property before the sale of your current home is complete. This can be an attractive option if you need to move quickly or if you’re finding it difficult to sell your home. It can help you to avoid being stuck in a chain and prevent you from losing out on your next property purchase.
However it is typically more expensive than a traditional mortgage, and it can be difficult to obtain funding from a lender if you don’t have a solid plan in place.
Expanding your business
Another common use for bridging finance is business expansion. If you are looking to grow your business but do not have the capital to do so, it can provide the funds you need to purchase new equipment, expand your premises, or hire new staff.
Funding a quick or uncommon purchase
It is typically used when traditional forms of funding, such as bank loans, are not available or would take too long to secure.
Bridging finance can be a helpful tool for small businesses that need to make an unexpected purchase or take advantage of a time-sensitive opportunity. However, it is important to weigh the costs and benefits of using bridging finance before making a decision.
Debt consolidation/Debt payments
Bridging finance can also be used for debt consolidation. If you have multiple debts with high-interest rates, you can use this finance to pay them off. This can save you money in the long run as you will only have to pay one lower interest rate.
Find out more about bridging finance & loans
If you are considering short-term finance, it is important to speak to a financial advisor. They will be able to help you understand if bridging finance is the right option for you and your circumstances.
Bridging finance can be a great way to access the funds you need in a shorter time frame, but it is not suitable for everyone.
Get in touch with the team at Cap Ex today to find out more.