At Hank Zarihs Associates, our team are experienced financial intermediaries who specialise in both development and investment funding. When we talk about bridging finance, we really do know our stuff.
That’s why we’ve created this article for those currently preparing their deal prior to making an application. Although it’s all too easy to get wrong, only a few simple steps are necessary to put things back on track.
Here’s what we suggest…
1. Plan ahead
By its very nature, a bridge loan is only ever going to be a short-term solution, so make sure that even before your application is made, you’re planning ahead to secure permanent financing. If you can show that you have done this, you’re far more likely to be granted the capital you need in the interim.
2. Prepare your exit strategy
Better still, try to provide the lender you’re applying to with an exit strategy. As far as possible, explain to them how you intend to either clear the bridging loan in full (with interest added on top), or else move it on to a more permanent type of finance.
3. Break down all of the costs involved
Additionally, seek to break down all of the costs involved in your application, from how much you intend to borrow when you secure a more permanent form of finance, to how much you wish to borrow in the interim and how much interest you expect to pay on this. If you can, you might also want to include how you mean to cover such overheads.
4. Use a broker
Last but not least, we suggest approaching a broker to help you negotiate your deal. They can help you to get a lower rate from the bank than you would be able to secure as an individual, to keep your long-term costs as low as possible.
