Do you want to buy a property but you haven’t completed selling your other asset yet? If so, then you might want to consider bridging finance, also known as a bridging loan.
In this article, we will be discussing this particular loan and the advantages of using it.
What is bridging finance?
Basically, it is a type of a short-term loan that can be used to “bridge” the gap between the acquisition of a new asset that you want to make and the sale of your other property that is still in process.
By taking advantage of this option, you will be able to either purchase a new home or enter into a new business opportunity in such a way that the outcome favors your side. This means that you will have the chance of gaining more.
Purchase of a home
If you take a look at the marketplace nowadays, you will find a lot of offers when it comes to houses for sale. You can avail of a huge discount if you can make the payment within a certain period of time. This is a good example of when bridging finance can significantly help you. Without this loan, it will be hard to come up with the cash that is needed in order for you to acquire the asset.
If you wait until you have sold your old home, it may be too late already to avail of the discount that was being offered. So, if you are aiming to save money on a purchase that you want to make, and you are just waiting on the completion of the sale, then a bridging loan would definitely be a good solution.
A new business opportunity
Another great example wherein a bridging loan can come to your assistance is when you need a quick injection of funds to a new business opportunity. This is the time when you have the chance to earn more if you start the operation now, and it can’t wait until you have completed the first transaction that you have made.
What you need to keep in mind
Bridging financing is, indeed, a great help in situations wherein you need money the most. However, before you enter into an agreement with a lending company, it is crucial that you weigh things out carefully. Take note that such a loan bears interest and it is only good for a short term. If you fail to settle your obligation on time, the interest will start to accumulate, and this would defeat the whole purpose of taking out the loan. So, take your time in assessing yourself as well as reviewing all your options, and come up with a well-informed decision.…