Bridging Finance

Bridging Finance

Our Recommended Bridgers – Click on Logo

Kevin Wright

A Bridger that I have known & used for many years as have my Masterclass Students & Clients. You may ask why work with more than one Bridger, it’s really a question of horses for courses. An individual Bridger may be more comfortable with a Deal both in respect of Loan, Location & Detail, and, at the end of the day, you need Bridging Finance certainty.

 

Kevin also runs the highly-regarded Recycle Your Cash/Ninja Training, now over 2 days, shortly to be 3 days as Kevin increases the content that he covers. I became a Ninja over 1 day, we started at 9 AM and finished about 12 hours later! Read my Review of Kevin’s Ninja Training. The main thrust of the Ninja Investor Programme is protecting your, possibly limited, cash pot by Strategic Buying, Choice of Property & Alternative Funding, all core Masterclass principles. Kevin also brings his Expert Knowledge on Bridging & Ninja to theĀ Auction Masterclass.

 

Rory O’Mara

Who I have also used on many occasions, both personally, for Clients & Masterclass students. Nothing is too much trouble for Rory, on one occasion, having been let down by another Bridger, Rory sorted out bridging finance for a Client in 3 days to make an Auction Completion Date.Whilst Rory does not run Training Courses as such he does provide valuable & very experienced one-to-one Consultancy on Bridging & associated matters.

 

Scott Hendry

Previously know as Auction Finance with Scott Hendry still in charge, Scott is to be found regularly at Auctions throughout the UK. together is one of the leading bridging finance providers in the UK and whilst I have not used them personally, they have been used by a number of my Masterclass students who speak very highly of them. They are also closely associated with David Sandeman’s EIGroup, who we also work closely with, and that association is good enough for me to recommend Scott and his team.

Bridging Finance Brokers – Bridgers

Bridging Finance is the principal source of auction property funding, using borrowed monies, available to investors for buying at auction.

Because of the timescales, completion is generally 14 to 28 days after auction day, conventional mortgages are not really an option and, due to the financial penalties that can be claimed if an investor fails to complete, any source of borrowed money must be totally reliable, but, even with DIP in place, conventional mortgages can still be changed at the 11th hour.

That is not to say that Bridging Finance cannot be changed/withdrawn at the 11th hour, it can, and for that reason,Investors need to know that there Bridging Finance Broker (Bridgers), will deliver, because failure to deliver does not mitigate non-completion penalties.

Like most forms of investment borrowing, investors need to establish a relationship with their lender or broker as either will take a view on the viability of the project, the value of the security & the ability of the investor to deliver their project/strategy.

In this context Track Record is very important, as is the Track Record of the Bridger from the investor’s point of view.

We currently recommend & endorse 3 Bridgers, with a 4th to be added shortly.

Each of our Bridgers has either provided/arranged Bridging Finance for us personally or Client Investors or Masterclass Students.

Bridging T.O.B’s

As in any competitive market, terms vary between Bridgers.

Variations may not only be based on lending rates, but also on the investors project and the Bridgers personal assessment of risk. Obviously, the greater the risk, the higher the cost and risk can come under a number of headings, project viability, term, repayment structure to mention three.

Bridging finance is lent on either an open or closed basis. Open, the more expensive, means that there is no repayment plan or end date at the start of the arrangement whereas Closed, includes both those aspects, a repayment plan & date.

Typically bridging costs include the following:

  • Arrangement Fee
  • Legal Fees (both sides, yours & the Bridger)
  • Security valuation fees
  • Exit Fee
  • Monthly Interest
  • Disbursements (money transfer fees, land reg fees) etc

Loan Amounts

Typically,Bridgers will lend up to 70% of the value of the property, in the case of auctions, this generally means the Hammer Price.

Subject to additional security, ideally involving a 1st Charge but sometimes a 2nd Charge on the Equity, Bridgers will generally lend up to 90% of the value of the property being purchased. The 10% balance is almost always down to you.

You will note that this page is peppered with words like, ideally,sometimes, generally, almost, typically, all words that denote a degree of uncertainty, and that is the case. Because of this uncertainty I developed a spreadsheet, a Comparator, which will analyse up to 3 different Bridging quotes so that you can compare the overall cost.

Timescales

Bridgers work to very short, tight timescales when compared with conventional mortgages. It is not uncommon for the whole procedure to take less than 7 days meaning that within 7 days the Bridging Funds are credited to your bank account. To facilitate this speed of action though, it is important to establish the relationship I have mentioned, if only to find out what your chosen Bridger is comfortable with, in all respects, as they are still unlikely to give you a firm quotation until the property has been identified.