According to the news website Techround, UK bridging lenders have experienced a strong growth over the last few years.
NewBusiness.co.uk covered the story in November 2016, stating that in 2011, the market was worth around £750m a year and this rose to £2.2bn in 2014. In the last two years, this has almost doubled to £4bn.
Bridging loans are very popular for property investors who use short-term loans to complete property sales whilst waiting for a mortgage to be completed. Some property developers use bridging loans to purchase property then refurbish them before selling the property at a profit. Private individuals commonly use them to complete the purchase of a house if their existing house has not yet been sold.
Techround reported that there are over 40 bridging finance lenders in the UK, and over 100 brokers who arrange bridging financed deals. Interest rates are low, with the lowest being 0.59% per month. Bridging loans can be for small or large amounts, with £250m the maximum that can be borrowed, and are available for periods of between 3 and 24 months.
Bridging loans for purchasing property are usually restricted to 75% of the value of the property. Though the majority of bridging loans are for purchasing or refurbishing property, businesses can use bridging loans to raise money to purchase stock, equipment, or as a solution to temporary cash flow problems.
It is advisable to use a bridging loan broker, who can access the best deals available.