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Short term funding or bridging finance is quite possibly the most under used form of finance in Australia today. True bridging loans provide borrowers with immediate access to funding with a bespoke ‘no fuss’ approach to their needs.
Bridging finance is useful in a number of scenarios;
• Refurbishment – buying a dilapidated investment property and renovating it with an aim to sell it in a short space of time;
• Working capital – using a facility with the aim to secure new opportunities in anticipation of delayed accounts receivable;
• Auctions –for people who aim to purchase a property at auction and funds are required quickly; and
• One of the most common usages is when people buy a new property before their present one is sold - "a bridge".
The biggest misconception regarding short term funding is that they are “No” or “Low Doc” loans. In fact, this is quite the opposite – short term funding requires a borrower to disclose the same information requested for any “Full” document loan. As a lender the most important pre-requisite is that there is an obvious cost-benefit to the client. In other words, will this facility enable a client to exploit and capitalise on an opportunity and is there a pre-determined exit strategy that enables a payout within an agreed timeframe. The real advantage is the timely fashion in which short term lenders operate.
With bridging finance, the loan will always be secured against residential or commercial property. A first or second charge will be taken against new or existing property, or a combination of both. Bridging is much quicker to arrange than a normal residential mortgage; on average 3-5 working days from first enquiry to completion.
For more information call us on 1300 166 639
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