Sometimes, you need cash fast. Whether you’re buying a property at auction, dealing with a cash flow crunch, or funding a new business opportunity, waiting for a traditional loan approval can feel like watching paint dry.
This is where bridging loans come in – a financial tool designed to get you the funds you need, quickly. But how fast are we talking? And what makes bridging loans the go-to option for time-sensitive financing?
The Speed of Bridging Loans: How Fast Can You Really Receive Funds?
Bridging loans are known for their fast turnaround times compared to standard loans. While a traditional mortgage can take weeks (or even months!) to process, bridging loans are typically much faster. In some cases, you could receive your funds in as little as 48 to 72 hours, depending on the lender and your situation.
Stephen Clark, founder of bridging finance company Finbri, says “Some bridging lenders can really expedite the loan underwriting process. We’ve seen the smaller private funders underwrite loans within 48 hours, enabling disbursement of funds within 72 hours – even over the weekend. This makes all the difference to businesses that need a fast solution to their credit crunch issue.”
That’s seriously quick! But not all lenders operate at this speed, and the time frame will depend on a few different factors.
What Affects the Speed of Receiving Funds?
While bridging loans are generally fast, the speed at which you can access your money will vary depending on certain key factors:
1. The Lender – Some lenders, particularly smaller private ones, have streamlined processes that allow them to approve and release funds much faster than larger, more traditional institutions. These smaller lenders are often more flexible and focused on quick turnarounds.
2. Your Preparedness – If you have all your documents and paperwork ready to go (e.g., proof of income, credit reports, property details), it will significantly reduce delays. Make sure you’re ready to provide any necessary information as soon as it’s requested.
3. The Loan Amount – Larger loans might take a bit more time to underwrite and approve, simply due to the increased risk for the lender. However, many lenders specialise in fast-tracking smaller loans, making it easier to get your funds sooner.
4. The Property in Question – If you’re using the loan to purchase property, the type of property and its condition can impact how fast the loan is approved. Unusual or complex properties may require more time to assess, slowing down the process.
Fast-Track the Process: What You Can Do to Speed Things Up
There are a few things you can do to help ensure your funds come through as quickly as possible.
- Choose the Right Lender – Not all bridging lenders operate at the same speed, so it’s crucial to select one known for quick approvals. Smaller, private lenders are often more efficient at pushing deals through. Do your homework and ask about their typical processing times before you commit.
- Get Your Documents in Order – You don’t want to be scrambling for paperwork after you’ve submitted your application. Have everything ready upfront – including proof of income, property details, and any other necessary documentation.
- Stay in Touch – Once your application is submitted, keep communication lines open with the lender. If they need anything from you to keep the process moving, respond as quickly as possible.
These proactive steps can help shave hours, or even days, off your approval time.
Bridging Loan vs Traditional Loans: Why Go the Bridging Route?
If you’ve ever applied for a traditional mortgage or business loan, you know it can be a painfully slow process. Between underwriting, credit checks, and property valuations, it could take weeks before you even hear back from the lender. For people who need funding quickly, that’s simply not an option.
Here’s why a bridging loan might be the better choice:
- Speed – With the right lender, you can have funds in your account within a few days. Traditional loans don’t come close to this level of speed.
- Flexibility – Bridging loans can be used for a wide range of purposes, from covering a temporary shortfall to securing an opportunity that’s just too good to pass up. You’re not limited to just property purchases, which makes this type of loan much more versatile.
- Less Red Tape – Traditional loans often come with extensive paperwork and checks. Bridging loans, on the other hand, are designed to be fast, with minimal red tape and a focus on moving quickly.
Is a Bridging Loan Right for You?
Bridging loans aren’t just for property developers or big businesses – they can be a lifeline for anyone who needs funds quickly. If you’re in a situation where time is of the essence, and you need access to cash fast, a bridging loan could be the perfect solution.
However, it’s essential to remember that bridging loans are typically short-term solutions. They’re not meant for long-term borrowing, and the interest rates can be higher than other types of loans. Always ensure you have a clear repayment plan in place.
So, if speed is what you’re after, a bridging loan might just be your best option. And with the potential to secure funds in as little as 72 hours, you’ll have the cash you need without the long wait typical of traditional loans.
In short, when time matters, bridging loans deliver. Get your documents ready, find a lender that values speed, and be prepared to act quickly. Who knows? You could have those crucial funds in hand before the weekend is over.
Article and permission to publish here provided by Rhino Rank. Originally written for Supply Chain Game Changer and published on September 9, 2024.
Cover image by Raten-Kauf from Pixabay.