Bridging Loan: Is It a Good Source of Immediate Funding?
Recently updated on January 10th, 2023 at 05:11 pm
A bridging loan is a short-term financial solution often used to purchase property, but it can also be used for various purposes. Borrowers applying for a bridging loan must have a property that will serve as collateral.
Is taking a bridging loan a good option for securing funds?
Let’s check out some quick facts on bridging loan eligibility and its feasibility.
What is a bridging loan in Australia?
A bridging loan allows an individual or a business to acquire finance quickly. In many instances, a bridging loan will ‘bridge’ or fill a financial gap between buying a new home and selling the current one.
Is bridging finance a good idea?
It’s always best to speak to a financial advisor or broker to assess your situation and give you a better idea of how much you could potentially borrow and different loan structures to consider.
Here are some reasons why bridging loans are increasingly popular in Australia:
1. Flexibility
A lot of bridging loan lenders allow borrowers to make interest-only payments during the duration of the loan. This gives borrowers some ‘breathing space’ and flexibility between selling an existing property and buying a new one.
2. Quick process
Compared to traditional loans, bridging loans in Australia generally have fast approvals and provide funds quickly. While traditional loans can take weeks to clear, bridging loan funds can be available within days.
3. High credit limit
Bridging loans often have high credit limits that enable borrowers to obtain large large sums. At Mango Mortgages, you can borrow from as low as $25,000 to as high as $500,000+.
5. No lengthy background checks
A bridging loan requires as an asset as security (usually a property), so very minimal documentation and income assessment is required, which helps expedite loan approvals.
How quickly can you get a bridging loan?
At Mango Mortgages, funds can be released within days, depending on your eligibility and ability to produce the relevant documentation. Click here for the detailed requirements.
What are bridging loans used for?
Bridging loans are usually a good option for securing finance quickly. While they are more commonly used in real estate, a bridging loan can also be used for a variety of other reasons. Typical uses include renovating a property intended for sale, paying some medical or legal bills or settling a personal debt.
For businesses, a bridging loan can be used to fulfil an existing purchase order wherein your financials may not be sufficient. You can also use it for your operational expenses or advance stock purchase.
Is there an alternative to a bridging loan?
Mango Credit offers a suite of different products, including:
- Caveat loans
- First mortgage loans
- Second mortgage loans
- Home equity loans
Key takeaway
A bridging loan is a short-term finance that can be used to obtain funds quickly, with minimal paperwork. Mango Mortgages has a simple bridging loan application process that helps fast-track funding.
Mango Credit
Yanis Derums is the Founder and Director of Mango Credit– a leading private lender specialising in bridging loans for personal use and business short term loans for commercial and/ or investment purposes. Yanis has extensive experience with financial analysis, credit assessment, product structuring, and general business management