Bridging Finance $3,000 to $100,000

Perks of Bridging Finance

The greatest benefit of bridging finance is definitely being able to purchase a new property before being able to sell your old one, without the fear of having no place to live. It gives us a peace of mind knowing that we do not need to fret over how long it would take to sell a property before having enough money to purchase a new one, and this is always a bonus.

What is bridging finance?

Bridging finance is essentially what some people may consider a second mortgage, though only temporary. It is a commercial and investment loan through a caveat. The way which bridging finance is generally used is where a person may consider selling their home, whilst at the same time is seeking to purchase a new home. The problem with this is, he or she wouldn't have enough money to buy the new property before they sell their existing one, but if they sell it beforehand, they would have to find a place to store all their furniture, as well as a place to sleep.

Bridging finance for property

Bridging finance resolves this problem through lending you a certain amount of cash based on the value of your existing property, generally a certain percentage of up to 70% depending on lender or bank. With the loan, borrowers are then able to purchase the new property, whilst then selling their existing real estate afterwards, ensuring they have a place to sleep and keep their assets.

Bridging finance for investments

Bridging loans are not always used for the sole purpose of purchasing property. It can also be used in a form of investment. This generally happens when certain opportunities arise within the stock market. Through the particular stock portfolio, an investor may see a potentially large reimbursement in the near future. With bridging finance, he would be able to purchase the particular stock share, through which when the value is high enough, the investor would then be able to release it back into the market whilst reimbursing greatly in profit. He would then use the profit to repay the loan.

One thing that investors must remember is that with stock shares, there is always an equal chance of losing money, so it is absolutely vital that you know what you're doing, and ensure you will still be able to repay the bridging loan, otherwise this could result in serious consequences.

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