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A bridging loan is very different from a standard business loan, but many SME’s do not understand how. In this week’s blog, Think Business Loans outlines what a bridging loan is and how it can benefit your business.

4ED4A980-1367-4548-9284-3CBE142D6E3E Created with sketchtool. What is a bridging loan?

A bridging loan is short term property backed finance. This type of commercial funding allows you to fund your business for a short period of time, while allowing you to sell your existing property or refinance to longer term debt

4ED4A980-1367-4548-9284-3CBE142D6E3E Created with sketchtool. The pros and cons of bridging loans

There’s no doubt that bridging loans can be a useful tool for businesses. However, they can be riskier than other types of business loans, which is why it’s important to know the pros and cons before you apply.

Pros

  • Think BulbApplications for bridging loans are usually completed within 14 days, making them idea for businesses in urgent need of funding
  • Think BulbBridging loans can be used to purchase properties that you would previously be ineligible to borrow for
  • Think BulbBridging loans come with competitive rates, starting from as little as 0.37% per month
  • Think BulbAs they are short term, they can often be repaid early without penalty. However, you should always check with your loan provider

Cons

  • Think BulbYour home is at risk, if you don't keep up the repayments on your loan
  • Think BulbIf you borrow for an extended period of time, the interest charges will be much higher

4ED4A980-1367-4548-9284-3CBE142D6E3E Created with sketchtool. How to get the best possible business loan?

Before you take out a bridging loan, it’s important to consider the total cost when comparing products from different providers. While many often chase the lowest interest rate on business loans, many fail to realise the additional charges that come with these.

When it comes to securing commercial funding, it’s vital to invest in the correct business loan for your business. But knowing which lender you are eligible to apply for can be difficult.

At Think Business Loans, we search and compare over 200 commercial lenders and business loan providers. That way, we can match your business against your eligible options and see how much you are able to borrow; without a credit check.

If you would like more information on how our team can secure the right business loan for your company, get in touch with our lending managers today.

Jessica Court

Jessica Court

Jessica Court graduated from the University of Portsmouth in 2017 with a bachelor’s degree in Media Studies. She has previously worked within the In... Explore Author