What is Bridging Finance

The definition of Bridging Finance is dependent upon what the money is for: business purpose, investment, buying a second property or any other worthwhile business purpose.

For example, if a company has encountered a short term cash flow problem and requires a cash injection to carry on their business as usual, bridging finance could be defined as a short term finance solution for business cash flow problems.

Another example of bridging finance: A shares trader has come across a share portfolio too good to bypass, he needs money within 48 hours or he is going to miss out on this opportunity. Having a substantial equity in his residential property he can obtain a short term loan secured by his property. In this example, bridging finance is a short term loan for investment purpose.

Furthermore, a common reason for obtaining bridging finance includes people who have bought a new house while waiting for their current house to be sold. They need to bridge the gap between getting the money from selling their current home and paying in time for their new home.

The interest rates for bridging finance are higher than standard as the funds can be obtained very fast in comparison with normal bank applications. The funds are paid back after an agreed time period, usually 1 to 3 months. In some instances the term can be extended to 12 months.

It is important to note that bridging finance is always secured against real estate. (Registered 1st and or 2nd mortgages over property) In some instances vehicles, boats, shares, equipment, etc. can be offered as an additional security.

Our minimum amount available for bridging finance is $10,000, the maximum amount will depend on the value of your security. Generally, we can lend up to 75% of the value of your security.

Below are a couple of bridging finance examples…

Business capital raising –
Our client from Brisbane is running a successful business for 12 years. Due to a rapid expansion of the company, cash flow problems have occurred. The company needed $450,000 within 4 days to secure a deal worth $1.8 million.

The client had a property (residential home) on the Gold Coast with substantial equity available. We were able to organise bridging finance within 72 hours. The bridging finance has enabled our client to secure his business deal and he successfully repaid the loan to us within 2 months.

Buying new house before selling the current house –
Our client from Adelaide purchased a retirement property in Melbourne. To secure a good price for the Melbourne property, our client had to purchase it before selling their current house.
We were able to organise $285,000 bridging finance for 4 months, secured against their current home which was mortgage free, The Melbourne home purchase was completed and their original home sold in 3 months, the bridging finance was repaid within 4 months.

IF you need money fast, apply for bridging finance now, and receive the funds within days. If you have any questions please call us during business hours