According to a press release appearing on SBWire.com on November 2, 2016, there has been a rise in bridging loan applications during the third quarter of 2016.
Following Brexit, bridging loan applications fell, but during the third quarter they rose significantly. Some lenders report rises of over 50% in the third quarter compared to the second quarter of 2016.
The Bridging Trends report recently stated that mortgage delays were the most popular reason for bridging loan applications, with refurbishment the second reason. Landlords often use bridging loans to refurbish properties before tenants arrive.
Many of these loans were used to raise money quickly for commercial property purposes. Since commercial mortgages are often slow to arrange, bridging loans are an ideal way to raise short-term finance to complete commercial property purchases while waiting for the commercial mortgage application to be completed. Bridging loans are also used to secure successful bids on property purchases at auctions.
Though most bridging loan applications are for property-related reasons, lenders point out that a bridging loan is flexible and can be used for many purposes. They can help businesses cover temporary cash flow shortages, meet unexpected tax bills or pay for liabilities during seasonal periods when income is low.
Another reasons for the popularity of bridging loans is that the monthly interest rates on loans has fallen to as low as 0.85% a month in some cases. An independent broker can find the best bridging loan deals.