Business Bridging loans will help you access cash while you sell an asset.
Business Bridging loans are short-term business loans that will assist you in urgently accessing business capital while you are busy selling an asset. A business bridging loan will also provide you with business capital while you are selling a piece of real estate. You may have even sold your home or commercial property but you cant wait until the sale settles, and you need the funding now. That’s where a business bridging loan is the perfect solution. Then when the sale of the real estate or other assets settle, you can then pay your business bridging loan out in full.
How do business bridging loans work?
Lets say you urgently need $500,000 for your business, and you are planning on selling some real estate, some equipment, or you even have a huge invoice that will be paid to you but not for another few months. You can get a Loans One Buiness bridging loan in 24 hours, by securing it against real estate. When the money eventually comes in from the sale of the asset or the payment of your invoice, you then pay our business bridging loan out. It’s that simple. It’s just a short-term bridge between now and a few month’s time. Best of all, there are no payments to make during the term of the loan, and they can be funded by the next business day. We don’t need to see financial reports or cashflow records either.
Different Types of Business Bridging Loans
There are primarily two kinds of bridging funding, and they are:
● Closed Bridging funds
The borrower can apply for this alternative when there is already a contract of sale on the existing property, and they know the fixed date when the home will get sold. You can then pay back the loan with the funds received by selling along with fees and interest rate on this current date.
● Open Bridging Funds
This option is applicable when the existing property has not yet been sold. The term for this loan is up to one year.
Advantages of Applying for Business Bridging Loans
Whether upgrading or downsizing, short term bridging loans can offer a solution to avoid any stress of selling your home first and searching for temporary accommodation while finding your new home. Let us now look at the benefits of bridging finance in Australia.
● You can have complete confidence while finding a new house but have not begun the process of selling your current residence.
● You can ignore the difficulty of renting a new space till you have found a new home or the building is still under construction.
● The best bridging loans offer the borrower the alternative of making the payments for the current funding only. You have to pay only the interest of the bridging finance till the time of expiring.
● It includes the alternative of making payments during the loan term for reducing the interest amount.
● If the equity and the property value are sufficient for the bridging funding, only the upfront costs like the legal fees and the stamp duty will get added to the loan.
How to know if Bridging Loans are perfect for you?
● Get a thorough and correct evaluation of your current asset and always remain realistic about the selling price.
● We will recommend having a minimum of 50% equity on the current property.
● Always calculate the required time for selling the property accurately. What is the real estate market where you live? Also, consider the time, the money will take to reach your account for complete settlement.
● Always make some small payments with interest rate during the bridging loan term for minimizing the overall debt and interest costs
Things to know before applying for a business bridging loan in Australia
● Availability and Fees
Short term business bridging loans are not available for all types of home loans. There can be some charges or fees based on the loan type.
● Interest Rate
The best bridging loan of LoanOne is an interest-only funding option only for the first 12 months from the time of approval. The longer you take to sell the existing house, the longer there will be an interest rate charged on this funding.
● Timing
If you cannot sell the house within the agreed time, LoansOne can negotiate an extension of the loan term until the sale of the property.
If you want to know about bridging funding, take it to our financial specialists directly.
Call us now at 1300 524 472 to learn more about our secured short-term business loans, or simply Apply Now to see if you qualify.
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Frequently Asked Questions
The cost will vary depending on the type of bridging loan and how you are assessed
The equity you have available in your property will determine how much you can borrow. You will need above 15% available equity to qualify.
Yes they do
This will vary depending on the lender and how you are assessed but generally interest rates will range between 1.95% pm to 3.95% pm
Bridging finance is essentially a short term product and designed to be under 1 year
There is a possibly you can still get bridging finance depending on the type of bad credit you have