What Is A Bridging Loan?

If you are looking for ways to obtain immediate funding while you’re waiting for long-term financing, you may be wondering ‘What is a bridging loan?’ and ‘How do bridging loans work?’

A bridging loan is a short-term loan taken out by a borrower against an asset, such as real estate, to help with immediate monetary needs, and it’s one of the loan types we offer here at Funding. 

Since we began in 2015, our goal at Funding has been to provide our clients with fast and flexible loan offers to ensure a great experience with us. Our industry experts do this by using cutting-edge technology to streamline the loaning process. With thousands of clients served and numerous loans funded, we’re sure we can help you get the financing you need.

What are bridging loans used for?

For those of you wondering what is a bridging loan used for, they are used to bridge a gap in the finances of an individual or a business. It is a short-term loan that provides the borrower with immediate cash flow to take care of current obligations.

Bridging loans used to be mainly intended for auction buying, property developments, or funding property purchases. For example, an individual could purchase a new house using the equity they have over their current property. Nowadays, bridging loans are used for all kinds of monetary transactions as long as the borrower provides the lender with a clear exit strategy to repay the loan.

With this in mind, there are a few bridging loan eligibility criteria that Funding requires their borrowers to possess. Borrowers must have sound real estate security, a strong repayment strategy, and the ability to meet all the scheduled repayments. At Funding, we lend to individuals and businesses with equity in Australian real estate, such as commercial and residential property, and even vacant land. 

How much deposit would I need for a bridge loan?

The fees, including the deposit required, vary from lender to lender. It’s essential to look for a loan company that is transparent about all the costs involved when applying for a loan.

When you send your unique loan scenario to Funding, we can provide an outline of applicable fees and rates together with same-day conditional approval. You can view all the relevant information to help you move forward with your short-term bridging loan application. Once you receive formal approval, settlement is possible in as little as 48 hours. 

Our loan amounts range from $20,000 to $10 million, with repayment periods of one to thirty-six months. Your principal amount depends on your type of security property and property location, while your bridging finance rate depends on your principal and your loan period, among other factors. To get an idea of what your interest rate could be, request a personalised Express Quote today – no need to look for a bridging loan calculator. 

Interest rates for short-term bridging loans may be lower compared to unsecured loans due to the security of the asset you provide. Enjoy flexible rates with Funding, as we offer an array of secured property loans to help fund your next project, purchase, or dream goal.

Will I need a proof of income for a bridging loan?

The requirements for a bridging loan vary across different lenders. Taking out a bridging loan with Funding doesn’t require you to provide proof of income since the loan is repaid as a lump sum and not with monthly repayments. Furthermore, the security of your loan is found in the assets you provide.

To begin your loan application with Funding, you only need to provide the following details:

• Basic personal information (such as name, email, and phone number)
• Loan details (such as the purpose of the loan, loan principal, and loan repayment terms)
• Property information

You can also upload any files that you think are relevant and can help with your loan approval. Before you click the submit button, we highly encourage you to go through your loan application again to ensure there are no errors, as this could be a hindrance in your approval process.

Take advantage of bridging loans from Funding today!

A bridging loan is a great way to obtain quick funding while you look for long-term or permanent financing. Funding approaches loans in a common sense way, meaning we take into account your specific needs and situation to help you. 

We offer a variety of loan options that can suit your unique scenarios, such as commercial property loans, renovation loans, and even a second mortgage. For example, if you are a business owner looking to purchase equipment or expand your enterprise, you may consider applying for a short-term business loan.

If you want to learn more about bridging loans or need any assistance regarding the products offered at Funding, feel free to get in touch with our customer service team on our website, through email at info@funding.com.au, or by calling us at 1300 44 33 19.

Get a quote with us today, and enjoy your bridging loan with Funding, the home of faster and simpler digital mortgages.