£25,001 to £100m (maximum 80% loan-to-value ratio)
Typically up to 12 months but can be up to 3 years
Interest rates might be lower or higher than your existing bridging loan (plus arrangement fee)
From 48 hours
Re-bridging (if you're approaching the end of the term on your bridging loan)
Any business with an existing bridging loan
If your business is approaching the end of the term on a bridging loan, you’ll need to re-bridge, i.e. arrange a new bridging facility to replace your existing loan. You can either arrange a bridge extension (loan) or you might prefer to move your loan elsewhere.
The amount is £25,000 to £100m (maximum 80% loan-to-value ratio). Usually up to 12 months but can be up to 3 years.
If you’re looking to refinance an existing bridging loan at a better interest rate, or if your existing bridging loan is coming to the end of its term and you no longer have an exit in place (i.e. something’s not gone to plan), you have two options.
• Remain with your existing lender
Bear in mind that arranging a loan extension with your exiting lender might work out more expensive, especially if you have to pay an extension or rearrangement fee. Also the term might be much shorter than the original loan, so you might be in the same situation again before long.
• Find an alternative lender
Moving your loan elsewhere might (or might not) be a cheaper and better option in the longer term.
• Quick way to obtain further financing – with turnaround times of 48 hours, it’s fast.
• You can manage long payment cycles – as many start -up companies suffer from cash flow problems, alleviate this common cost of doing business. This allows you to cover up front costs to realise business goals.
• Retain control of your business – give up no equity of your business, placing you fully in control of your business
! Higher interest rates – as a bridging and re-bridging loan is considered short term lending, the rate charged may be higher
! Higher payments – also as the payment terms are shorter, repayments will be correspondingly larger over a period of shorter time.
! Higher risk – You’ve taken out a bridge loan in anticipation of future income. If this fails to materialise, you will be burdened with large repayments which could severely impact your business moving forward.
Although understanding bridging financing is fairly straight forward, getting the most value of out of your commercial bridging and re-bridging is not necessarily easy! The timing, length and term value of a bridging loan is crucial to ensuring it is an optimal choice for your business. Before proceeding ahead please consider carefully the cost and benefit of a bridging and re-bridging loan. We also provide a variety of short, medium to long term lending options such as invoice finance, working capital finance or revolving credit facilities.
If you have taken out a bridging loan and you are unsure if you want to re-bridge, consider:
• short-term business loans – usually between 3 and 18 months (often referred to as working capital loans)
• ‘term’ loans – usually between two and five years (‘term’ means medium- or long-term)
• very short-term loans – including revolving credit facilities and other business overdraft alternatives
• long-term loans – these can run from 3 to 30 years, require monthly or quarterly payments from cash flow or profit, might restrict other financial commitments (e.g. debts, dividends or principals’ salaries), and can require an amount of profit set aside for loan repayment
• balloon loans – relatively small monthly payments, ending with final ‘balloon’ payment to pay off the remaining loan balance
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