Bridging finance is a viable option for investors

[This blog is by Karen Bennett, head of Sales & Marketing, Shawbrook Bank]

Shawbrook Bank
6th March 2013
Blogs
As a specialist lender to the property investor market we know that it’s an exciting time for those working in the sector.  From speaking to brokers and property investors on a regular basis we are becoming increasingly aware that bridging, or short term finance as it is also known, is becoming a more viable option as investors look to take advantage of property opportunities.

So why should brokers and investors be considering bridging finance?

Pricing is obviously one of the main drivers when clients are taking any form of finance into consideration. For most investors adding value to any property is the key to maximising any return, either from an immediate sale or by being able to charge higher rental charges.  With pricing across the bridging market now closer than ever to mortgage rates the timing is great for entrepreneurial investors.

We are striving to make Shawbrook the lender to follow in 2013 and recently made changes to our short term offering.  Shawbrook offers market leading rates of 0.65% per month for standard bridging and just 0.73% for refurbishment bridges.  These changes follow the change we made to our broker commissions for short term finance in January, acknowledging the additional work involved in bridging finance due to the speed of the transaction to 1.50%.  We hope these movements show our determination to succeed in the short term market.

Another cash associated factor is that bridging finance could make clients’ money go further. By purchasing with finance, there may be the option to manage two (or more) projects at once by getting bridges on each. The remainder of the client’s original cash could then be used towards deposits or required refurbishment work.

Speed is of the essence when it comes to using short term finance to take advantage of unplanned opportunities. We are fully aware that it’s a significant step when switching bridging providers as it’s always been a sector which relies of lenders’ ability to deliver.  Shawbrook has proven that we can deliver in terms of speed, pricing and service.  We have completed deals within 5 working days and feel confident we can deliver on the timescales required with short term finance.

Our short term loan products also offer property professionals the flexibility of having no minimum term, therefore if the clients manage to execute their plans for the property quicker than planned they can exit at any stage without any minimum interest charges.
The short term/bridging market is one that will continue to grow throughout 2013 and with specialist lenders driving rates and transparency it’s a market which will be more widely considered by property professionals as a genuine finance option rather than just as a last resort.
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