A bridge loan is a type of short-term loan provided by brokers to “bridge the gap” between the urgent need for finances and its availability. Below are some insights into what to consider when finishing your Bridging Loan application.
What To Avoid During Your Application
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Unclear Communication
Communication is undoubtedly key when applying for your bridge loan, so it is prudent to prioritise clear communication throughout the entire process. You must inform your broker about your unique circumstances as well as current and past challenges. Transparency simplifies the application process and increases its effectiveness, so keep this in mind.
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Secrecy
Being secretive will not help you during the application process. Therefore, be forthcoming with your broker concerning everything they ask you, including the realities of your financial situation and what you intend to use the loan for.
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Being Disorganised
It would help to be totally prepared before going to your broker for a bridging loan. Consequently, list some of your bridging loan requirements before applying, such as the amount you will require and what you intend to do with it. Additionally, specify how you intend to repay what you owe and the type of security you will need to secure the loan in the first place. Finally, reach out to your broker to find out whether you have finished your application successfully.
What To Do When Applying
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Research Your brokers Thoroughly
Many brokers offer their special terms and conditions to bridging loan borrowers. Naturally, some will appeal to you more than others. Therefore, it is best to research your brokers to find those with the best offerings before applying. Alternatively, you can rely on experienced brokers like Finbri to connect you to reputable brokers who can offer you these superior terms.
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Talk Through Exit Strategies
Your exit strategy is vital to the application process since it outlines your approach to repaying your debts as quickly as possible. Your broker requires this strategy it as assurance that you can repay your debts.
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Be Open-Minded
Stephen Clark from the UK bridging loan broker Finbri explains “In order to present your application to lenders in a way that they’ll want to lend, brokers will want to know all the relevant information when completing your application. Some of these questions might seem unimportant to you, however, to a lender it will help them make an informed judgement on the loan’s viability.” Therefore, be prepared to answer their questions honestly and in full, be it your financial records to your plans for the money. The information you give will determine how successful your application is, so try to be very transparent in all communications with your broker.
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Know Your Timelines
It’s important to have a steady cash flow and a practical timetable when applying for bridging finance. These bridging loans are limited-term, so decide when you will repay it and other costs with a bridge loan. The best approach to this is creating a practical timetable to give yourself enough time to repay your loan. However, do this in advance after deciding whether you can complete your work and repay the loan in twelve months.
