Impossibility of Bridging Finance
Bridging finance generally deals with large fundings, so it is not surprising when applications are declined, possibly due to a bad credit history, or simply because borrowers are unable to comply with the loans conditions. This sets the misconception of bridging finance being unapproachable and rather impossible to obtain if you have a bad credit history. Although this is true to a certain extent, it should be noted that albeit being difficult to obtain with a bad credit history, it is not entirely impossible to get a bridging finance if you are well aware of what you are doing.
This is by far the most common response to overshadowing the problem of a bad credit record with bridging finance. By offering an asset, most likely a piece of property, you allow the lenders a peace of mind, whilst proving your every intent to repay the loan. Although a useful support, securing an asset may not always guarantee a success with the loan. As you still require a certain amount of income to repay the loan, low income may become a burden. This is because commercial loans in Australia cannot be approved by lenders exclusively for the purpose of profit, and the approval of bridging finance for someone with a low income can create suspicion.
Whilst seeking bridging financewhen an opportunity occurs, you should be well aware of your own limitations and not sacrifice everything into one opportunity. Under no circumstances should you use extreme measures solely for the purpose of getting approved. Try not to become desperate as a result of being rejected several times due to a bad credit history. Unlike most countries where a specific credit rating system exists, lenders in Australia simply use the credit record as a guideline, and ultimately it is up to individual interpretation. Depending on the lender, a bad credit history may appear as a good credit history to another lender.
As evidence of your intentions towards bridging finance, it is important to show lenders what you propose to do. Let them know that you have a specific goal to reach, and you have every intention of repaying the loan to achieve it. Letting them know the specific details on where and when you are planning to spend the bridging finance, and how you expect to gain profit to repay the loan can help on most occasions. With good intentions, lenders may even be more lenient in approving the loans, and may even offer benefits towards your bridging finance.
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