Borrowers are more inclined towards Bridging loans probably because of the fact that it takes comparatively less time for approvals and disbursements as compared to loans given by banks.
In quite a number of cases the applications were approved and completed within a few days. Some applications were given verbal or telephonic approvals within hours of submission of the application forms. However, circumstances as well as credit history of the borrower is given serious consideration before the loans are approved and disbursed.
Although these loans do not take too long to be processed the lenders of the bridging loans do set certain criteria that the borrowers need to meet and they also apply some strict and stringent rules for these applicants.
These lending institutions are generally small operators and have a specialized team for background checks, the same way a bank would do but without the inconvenience of the lengthy procedures of banks.
The decision making for the lenders usually takes a couple of hours if the borrower has a good credit history and all the relevant information given is compatible with the company’s lending terms.
Some lenders even follow it up with an email along with documents which provide indicative terms for the bridging loans. These documents are required to be signed by the borrower in order for the lender institution to send the application for further processing.
Once the lending institution receives the signed documents along with a list of other relevant documents supporting the borrower’s claims on identity and property, they will organize a property valuation to take place. The cost of this valuation will be borne by the borrower.
Once the valuation is done and the reports are sent to the solicitors for the legal process to start. When all is done the institution will instruct the solicitors to disburse the loan amount to the borrower.
On an average, the approval and disbursement for the first charge secured bridging loan are between 5 to 7 days. However if the transactions involved are more complicated or it involves second charge loans then a more realistic timeframe would be around 10 to 14 days. In case of redemption of first charge loans too it can take anywhere between 10 days to a fortnight. One can expect a disbursement of funds after about 2 to 3 weeks from the start of the application to completing all the procedures in between.
In an ideal situation, to fully complete a bridging finance application and disbursement can take a bare minimum of 4 days only.
The lending organization is more concerned about how and when they will be repaid. All lenders require a high level of confidence that whatever they have invested as loans for the borrowers they will be repaid as promised by the borrower.
All bridging loans are secured loans in terms of the property mortgaged in order to avail them. These loans are a boon for borrowers who are in need of financing on an urgent basis. The confidence of the lenders lies on the potential value of the property given as security.