What Are the Alternatives To Bridging Loans?

Bridging loans have really come into their own as of late, acknowledged and accepted by mainstream borrowers as a useful alternative to more conventional products. In the right hands and for the right purpose, bridging finance has the potential to be uniquely flexible, versatile, and affordable.

Even so, there will always be instances where a bridging loan is not necessarily the best option available. Either due to the nature of your requirements or issues with eligibility, your broker may advise you to consider the alternative options available.

The below options could prove more appropriate and cost-effective.

Here are just a few alternatives to consider when bridging is not the best option:

A mortgage extension

If you are in good standing with your current mortgage provider, you have a good chance of qualifying for a mortgage extension. This is simply where you increase the size of your mortgage to cover your requirements, in return for extending the term of your mortgage or increasing your monthly repayment.

Secured loans

There’s an extensive range of secured loan options available on the mainstream and specialist markets, both for business purposes and for private borrowers. Lenders implement their own policies with regard to the types of assets they are willing to accept as security, which could be anything from the home you live into jewellery, watches, cars, business equipment, and so on. Secured loans tend to be longer-term in nature and repaid over the course of several years.

Unsecured loan

If you require a fairly modest capital injection, an unsecured loan can be a good option. Some secured loan applications can be processed within 24 hours, typically with maximum loan sizes of around £15,000 to £20,000 available. Repayment terms are flexible (usually a few years), and interest rates can be highly competitive.

Property development finance

In the commercial arena, specialist property development finance can be a fantastic facility for established developers and construction companies. With development finance, there are no upper limits placed on how much can be borrowed, based on the value of the project being undertaken and the security provided by the applicant.

Refurbishment loans

Open to both mainstream applicants and commercial borrowers, a refurbishment loan provides the funding needed to perform minor or major property renovations before selling or letting it out. It is effectively a specialist type of bridging loan, but it is issued exclusively for property refurbishment and renovation purposes.

Commercial mortgages

Where time is less of a pressing factor, a commercial mortgage could be used in place of a bridging loan. Commercial mortgages work similarly to conventional mortgages, though they are issued exclusively for the purchase of business properties and have much higher minimum deposit requirements (often as much as 30% to 40%). As it can take several weeks (or even months) to arrange a commercial mortgage, it is not a viable option in time-critical scenarios.

At UK Property Finance, our experienced brokers can provide you with the objective advice you need to decide which product is right for you. From bridging loans to development finance to all types of specialist business loans, we’ll scour the market to help you secure an unbeatable deal from a top-rated lender.

Call anytime for a free consultation or email us, and we’ll get back to you as promptly as possible.