Scaled For Your Needs
- 1 to 24 months
- No Minimum or Maximum amounts
- Competitive monthly rates
- Non-status and full status
- Bridge short-term funding gaps
- Interest roll-up schemes
- Adverse Credit – no problem
- Funding can be available in 5 – 7 business days
- Extend the term of funding
- Reduce costs
- Secure a better deal
- Increase borrowing
Re-bridging Loans are used to refinance an existing Bridging Loan if you are looking for a better interest rate or your existing loan is coming to the end of its term
A Bridging Loan is, put simply, a short-term loan which is secured against a property. The loan can be used - like a mortgage - to buy the property itself, or as a way of raising funding for any other business purpose.
It’s known a Bridge, or Bridging Loan, because it is designed to bridge a short-term funding gap. Bridging Loans have a relatively high cost and are intended to be repaid quickly, either by the sale of the property or by refinancing with another finance product designed for the long-term, such as a mortgage.
Bridging Loans are high-cost funding, but they have two great advantages. They are very quick to arrange and they can be used on property that is not suitable for mortgage lending.
After securing a Bridging Loan, most people will seek to refinance with a mortgage provider as a mortgage can provide long-term funding that is more affordable.
However, they can run into problems if development work overruns or for any other reason it is not possible to replace a Bridging Loan with a mortgage. Not only are the basic costs of any bridge high, but there may also be high penalty charges if the loan is not repaid on the schedule agreed when it was taken out.
The costs involved can mean serious financial problems.
The solution: Rebridging
You can find yourself unable to exit a Bridge Loan for a number of reasons. Bridges tend to have a maximum term of two years, and many must be agreed over much shorter periods. This can be a problem when planning permission takes longer than expected, contractors have been delayed or there have been difficulties with building works.
Sometimes, it can simply be that the duration of the original Bridge Loan was too short. Your bridging provider may be unwilling to extend your funding, or only do so under punitive terms.
The solution may be to refinance with a Rebridge Loan.
Rebridging to extend a finance term, or to reduce the costs of a bridge, are both possible. However, many bridging lenders will not consider Rebridging, as they may see the need to re-bridge as evidence of problems.
At Rangewell, we know lenders who can take a more flexible approach, and will assess each case on its individual merits.
Rebridging may help you:
- Extend the term of funding - giving you additional time to finish work on a property and ensure it is suitable for other types of funding
- Provide additional time for negotiation - it may take longer than expected to arrange the most appropriate long-term funding
- Reduce costs - if you already have a bridge which is proving costly, Rebridging may give you the opportunity to secure a better deal
- Increase borrowing - if your costs are higher than expected, Rebridging may help you access additional funding
What does Rebridging cost?
Short-term funding is always more costly than longer-term lending. Bridging Loans, therefore, have a relatively high cost.
The interest rates you may be charged could vary depending on your circumstances and your business, and the deal that needs funding. The reasons for needing Rebridging will have an impact on the interest rate also. If the Rebridge is simply to save costs, a relatively low rate could be achieved. If the existing loan has come to the end of the term because the property hasn’t sold, the LTV could be restricted and a higher interest rate charged.
In addition to the monthly interest cost, lenders charge a loan arrangement fee – a fee for setting up the loan. This fee is usually 2% of the total loan amount, although this can sometimes be discounted to as low as 1%, especially on larger loans. Fees and interest can usually be rolled up and settled with a single repayment.
REAL EXAMPLES OF WHAT WE CAN DO
Find a Rebridging Finance deal for a developer whose of a Thames-side build was delayed due to the demand for an architectural survey
Source a Rebridge to cut the costs of a hospital conversion that was running over budget
Found a lender to allow a builder to continue a project when structural problems turned a conversion into a rebuild
Find the most competitive Rebridge for a small builder to raise working capital
Why you need Rangewell to find the Bridging solutions that are right for you
Because of the large sums involved in property purchase, even a fraction of a percentage point can make a substantial difference to what you actually pay for a bridge. There are many different lenders who may be prepared to offer funding. However, each lender has their own approach to interest rates and fee arrangements and finding and comparing offers demands an expert eye.
At Rangewell, we have the expert knowledge that can not only help you secure the funding you need - it can save you a great deal of cash.
We can help you use Bridging Loans as a tactical source of funding for the short-term, and then work to find the most competitive source of long-term funding to replace them.
Helping you build your profits
For property professionalsProfessional investors and developers can Rebridge when projects overrun.
Avoiding costsBridging Loans can have punitive penalty clauses. Rebridging can avoid the extra costs.
Reduce expenditureRebridging can reduce costs, taking advantage of an increase in the value of the property to reduce LTV
Supporting negotiationWhen long-term funding is taking longer than anticipated, Rebridging can keep costs under control.
A fast applicationBridging lenders will take different aspects into consideration, including your credit profile, the value of the asset to be financed, and your exit strategy, so they can make a decision in the shortest possible time.
A single repaymentIn most cases, all fees, interest and charges can be rolled up into a single repayment made at the end of the loan term, when an alternative fund source has been arranged.
Download Rangewell’s free and detailed guide to Bridging Loans
How does a Bridging Loan work?
Is Bridging Finance classed as short-term finance?
How can a Bridging Loan support your business?
How do Bridging Lenders calculate the rate of interest on a loan amount?
What are the real costs - how do they vary between lenders?
Are all lenders authorised and regulated by the financial conduct authority?
What can a Bridging Loan be used for?
Is it a requirement that my business' registered office is registered in England and Wales?
The downsides of Bridging Loans
Bridging Finance options explained in more detail - including open and closed bridging loans, and pay monthly, rolled-up interest and retained interest short term loan
Completion dates for Bridging Loans explained clearly
What is the difference between a Bridging Loan, a Commercial Mortgage and a Buy to let Mortgage?
What paperwork do you need?
Are there administration fees with Bridging Loans?
What options have I for interest payments on a Bridging Loan?
Is it standard to make repayments every 28 days?
Guarantees and security
Key Terms to check
Can a commercial Bridging Loan be used for both commercial property and residential property if it is to be used for business purposes?
Is business finance the same as commercial finance?
How do interest rates vary between term loans?
How does the value of the property affect how much you can borrow?
Do I need an exit strategy in place before applying for Bridging Finance?
Does my company have to be limited, registered in England and have a Companies House registration number to be eligible for business finance?
You need to know how you will repayIt is essential to have a clear exit strategy to ensure the loan can be repaid to avoid paying high penalty interest rates.
Some Bridging Finance may require a regulated lenderIt is not always essential to use an FCA registered lender. Many reputable Bridging Lenders are members of the Association of Short Term Lenders, a self-regulating body which operates a strict code of conduct. Getting an expert view of which lender to use is essential.
Your property may be at riskYou should remember that a Bridging Loan works like a mortgage and property may be at risk if the loan repayments are not kept up to date.
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