Considering property bridging finance?
Published by Krios Capital Partners on 11th February 2020 -
Most property investors will
A bridge loan is a short-term funding solution to “bridge” a funding gap,
In short, it is a means to an end (and not an end
In our experience, one of the first questions of any bridging finance lenders will be: How is the client going to repay the loan?
Before diving into the various exit options, let’s remind ourselves of the main use of proceeds from property bridging finance:
Depending on the underlying security’s condition & location, etc. some bridging finance lenders may require evidence of
Regardless, it is to the clients’ benefit to get comfort upfront that the asset they’re buying can find itself a home with a mortgage lender as it removes uncertainty and additional costs further down the line.
Same considerations as the “buy-to-Let” scenario
The exit route is most likely to be via the sale of the asset at a higher price than the initial purchase (
In this scenario, bridging loans lenders’ appetite, proposed LTV, pricing and tenure will
the client’s experience and;
theexpected quality & liquidity of the proposed security (vs. comparables) post refurbishment.
Hence, clients will have to
In this scenario, the exit can be:
Same exit considerations as the “Buy-to-Let Investment” scenario will apply
Sale of the asset
Security’s condition and a good understanding of the local area demand dynamics will be key
All in, regardless of the purpose of the bridging finance, proactively devising a realistic and achievable exit strategy will not only enhance clients’ likelihood of securing a bridge loan but it will benefit them by reducing the uncertainty overhang.
At Krios Capital Partners, we strive to act as a one-stop-solution for our clients to deliver
Should you have any bridging finance requirements or just want to discuss a project, please get in touch with us and we would be happy to assist you.